en-USBlogBuilding Wealth. Growing Communities.Fri, 22 Feb 2019 14:12:47 +0000http://fishpig.co.uk/magento/wordpress-integration/?v=3.1.0.8https://patchofland.com/blog/
The 10 Best Days to Buy a HomeWe have all heard the saying that smart real estate purchases are based on location, location, location. But that suggests you focus only on where to buy a home. What about when? Data indicates that there are definitely months of the year—and even specific days—when you are statistically more likely to acquire a property at a discounted price. On some days, in fact, that price can be many thousands of dollars below a property’s estimated market value.

The question, of course, is which days? What are the best days to buy a home, and why? Let’s dig into the data and get those answers.

The Best Days to Buy a Home During the Last 5 Years

When research firm ATTOM Data Solutions analyzed more than 18 million sales of both condos and single-family residences over the previous five years (2013-2017), they found that during this time period there were only 10 days of the year during which buyers could find average home prices below estimated market value.

The Good News for House Flippers and Investors

Before we review these specific days of the year, we should point out that if you are planning to purchase a property as a fix-and-flip investment the good news for you is that seven of the 10 best days to buy a home are in December, which means you’re in a strong position right now to begin your search.

Let’s review the dates, going from those with the lowest average discount to the highest.

Number 10: December 8th

Homes on this date over the previous five-year period sold for an average $149 below estimated value (a 0.1% discount).

Number 9: February 9th

Homes on this date over the previous five-year period sold for an average $500 below estimated value (a 0.3% discount).

Number 8: November 9th

Homes on this date over the previous five-year period sold for an average $666 below estimated value (a 0.3% discount).

Number 7: October 12th

Homes on this date over the previous five-year period sold for an average $1,000 below estimated value (a 0.5% discount).

Number 6: December 1st

Homes on this date over the previous five-year period sold for an average $1,000 below estimated value (a 0.5% discount).

Number 5: December 21st

Homes on this date over the previous five-year period sold for an average $1,223 below estimated value (a 0.6% discount).

Number 4: December 29th

Homes on this date over the previous five-year period sold for an average $1,320 below estimated value (a 0.7% discount).

Number 3: December 4th

Homes on this date over the previous five-year period sold for an average $1,823 below estimated value (a 1.0% discount).

Number 2: December 7th

Homes on this date over the previous five-year period sold for an average $2,000 below estimated value (a 1.0% discount).

Number 1: The Best Day to Buy a Home: December 26th

Homes on this date over the previous five-year period sold for an average $2,500 below estimated value (a 1.3% discount).

Few buyers are actively searching for properties during the holiday season (and that number drops even more sharply during Christmas week), which means there will be less competition for any particular property during this period.

If a seller has a home on the market during the holiday season, they are clearly serious about selling, which gives a buyer strong leverage and negotiating power.

All of which helps explain why, as the ATTOM Data research shows, December is the best month to buy a home, and December 26th in particular is the best day to close on a property.

Be Ready to Close Quickly on One of These Best Days to Buy a Home

One final piece of advice: If you do find a great home and are able to negotiate a great price—particularly if you are looking to fix and flip the property—you will need to be able to quickly secure a loan to buy it. This is where a private lender like Patch of Land can be an invaluable partner.

]]>Thu, 15 Nov 2018 01:38:36 +0000https://patchofland.com/blog/all-projects/2018/11/15/the-10-best-days-to-buy-a-home/
https://patchofland.com/blog/all-projects/2018/11/15/the-10-best-days-to-buy-a-home/marketing@patchofland.com (Marketing)Marketing5 Tech Tools for House Flippers and Other Real Estate InvestorsWhether you’re a seasoned house flipper or just planning to take your first entrepreneurial step as a real estate investor, you should always be on the lookout for new tools, processes, and best practices that can help you improve your business. For this post, we offer five great technology tools to help real estate investors of all types, particularly house flippers.

1. HouseCanary

HouseCanary describes itself as the online data and analytics platform that helps real estate investors understand the true value of a property. Using the platform’s extensive database of current housing information, combined with its predictive analytics engine, you can evaluate a particular home’s potential return on investment—whether you are planning to buy and rent or if your investment strategy is to flip the house.

The app was designed with two personas in mind. First, there’s the new investor, who doesn’t yet understand how to evaluate a property’s profit potential.

The app also offers value to the experienced investor—who might have their own method of estimating profitability like spreadsheets, but may be seeking a more professional look when presenting their case to a potential lender.

HouseCanary offers a free trial, and is a technology worth exploring.

2. DealMachine

DealMachine is an interesting app that helps facilitate opportunities for you to buy off-market properties.

Here’s how it works. Let’s say you see a property that’s run-down or appears vacant, and you think it might represent a viable house flipping investment opportunity. You’ll take a picture of the home with your phone using your DealMachine app, and the app will automatically bring up information about the owner of the property. From there, you can simply push a button instructing DealMachine to send a personalized postcard to that owner offering to buy the house.

Using DealMachine could be a great way to get the process started with a potential seller. The app can help you to make more offers on investment homes and to act quickly on off-market properties that seem like good candidates for a house flipping investment.

3. Property Fixer

Property Fixer describes itself as the “ultimate tool for real estate investors who are flipping properties.” This could be a useful app to have handy whenever you’re out scouting for potential house flipping investments.

If you’re out in the field and you spot a property that looks like it could be a viable house flip opportunity, you can enter some basic information about the property and Property Fixer will help you do a “flip analysis” that gives you a broad estimate of profit and return potential on the investment.

The app offers both free and paid versions with varying feature sets.

4. MagicPlan

Let’s say you’ve found a property you are interested in flipping, and you want to dig a little deeper into possible turnaround time for any rehab or upgrades and your potential for profit. The MagicPlan app might be a great help with these next steps.

Billed as the “Floor Plan Creator for Everyone,” the MagicPlan app lets you use the pictures you take of the property’s interior to generate an Augmented Reality floor plan—including measurements of every room, the amount of flooring, paint or wallpaper you’ll need if you want to upgrade, and estimates of pricing for each of these materials.

In other words, with the MagicPlan app, you can simply walk through a home you’re considering as a fix and flip investment, snap some photos of the interior with your smartphone, and within minutes you’ll have a helpful estimate of the cost of updating the property for your flip.

5. Patch of Land

Of course, whatever apps you use to find and learn about your next real estate investment, you will almost certainly need to secure funding to purchase and/or renovate it.

Because banks and conventional mortgage lenders are often reluctant to lend to fix-and-flip investors, and because even those willing to lend often have application processes that take longer than you can afford to wait, you might want to work through an online platform like Patch of Land.

We are a nationwide private money lender specializing in house flipping projects. Our platform lets you submit your investment loan in minutes and—because we are also a direct lender with our own capital to loan—to get your loan funded in just days.

Take advantage of these innovative tech tools to grow your real estate business. Let us know if Patch of Land can help you with your next project.

]]>Wed, 14 Nov 2018 17:55:24 +0000https://patchofland.com/blog/all-projects/2018/11/14/5-tech-tools-for-house-flippers-and-other-real-estate-investors/
https://patchofland.com/blog/all-projects/2018/11/14/5-tech-tools-for-house-flippers-and-other-real-estate-investors/marketing@patchofland.com (Marketing)MarketingAn Industry Update from Patch of LandYou may have heard the news that crowdfunding platform, RealtyShares, is no longer offering new investments on their platform, and we believe this means they will soon be closing their doors.

There has been tremendous attention and excitement in the real estate crowdfunding space over the past five years, with Patch of Land and RealtyShares among the earliest players. At Patch of Land, we are proud to be at the forefront of providing innovation and disrupting the real estate investment market. Throughout our history we have remained true to our core values of building wealth and growing communities.

While competitors in the space have pursued different opportunities for growth and investment capital, Patch of Land has been able to manage exceptional growth and build a track record of delivering high-yield, short-term investments opportunities to accredited investors.

We are proud to report that we have returned over $200 million in principal and interest to our crowd since inception, and millions more to institutional buyers that have been an important part of our recapitalization strategy as a marketplace lender.

Patch of Land has developed a strong and fast-growing business funding almost 2,000 loans, exceeding $800 million in loan value on properties valued over $1.2 billion. Despite a highly competitive industry, we have experienced phenomenal growth over the past two years, reporting 98% growth in dollar volume from 2016 to 2017 and as of Q3 2018, 65% growth in dollars over the same period a year ago. We expect to finish calendar year 2018 with a strong fourth quarter.

As the industry continues to mature, there will be winners and losers in the space. We are proud of our disciplined growth as we continue to enjoy a healthy business. We are operationally sound, running a lean organization, closely managing expenses to deliver declining operational costs as a percentage of revenue as we continue to scale our business.

We are excited for what the future holds at Patch of Land. We look forward to continuing to provide a consistent and reliable source of capital to our borrowers and attractive short term yields for our investors.

If you have further questions or concerns regarding this update, please reach out to our Investor Relations team by calling 747-239-5115 or email investors@patchofland.com.

]]>Fri, 09 Nov 2018 22:48:25 +0000https://patchofland.com/blog/all-projects/2018/11/09/an-industry-update-from-patch-of-land/
https://patchofland.com/blog/all-projects/2018/11/09/an-industry-update-from-patch-of-land/marketing@patchofland.com (Marketing)MarketingInvestor Financing Heats UpThe following article was originally featured in AAPL's Private Lender Magazine. It speaks to the increased rate of financed home flips in Q1 of this year and the rise of lenders expanding the fix-and-flip market.

Flips purchased with financing rise to 9.5-year high

Housing analysts have recently expressed caution about the residential real estate investment market due to rising home prices and competition. But, investors continue to find deals and set records while increasingly tapping the debt markets to finance their flips.

Home flipping set a record during the first quarter of 2018 when homes flipped sold at an average gross profit of $69,500—the highest average gross flipping profit since first quarter 2000 (when ATTOM Data Solutions began tracking flips). Average gross profits were up 4.8 percent from $66,287 in the year-ago period.

The percentage of flipped homes purchased with financing this quarter reached its highest point in nearly 10 years. Homes purchased with financing and then flipped represented 35.7 percent of all homes flipped during the quarter, up from 33.5 percent a year ago and the highest level since third quarter 2008.

Why Financing is on the Rise

The number of lenders catering to the fix-and-flip market has expanded from the traditional hard-money lenders of yesteryear, a potential factor contributing to the rise in financing for flips. This new breed of lender is often found online, where borrowers get introduced to lending platforms that use sophisticated algorithms to determine if a potential borrower is a good credit risk. These technologically advanced online lending platforms have enhanced the speed and availability of financing, while also compressing the rates, a virtual “hat trick” for borrowers.

“We are seeing a lot of emerging lenders in this fix-flip space that are well capitalized and have deep pockets backing them, ready to lend money,” said Daren Blomquist, senior vice president at real estate data company ATTOM Data Solutions. “There is a lot of capital chasing the returns that lenders can get on home flipping deals, and also technology has played a big role compared to 10 years ago during the housing boom.”

Many of these new lenders are digital and national, making it easier for real estate flippers to access financing no matter where they are based. The new lenders in the space have made financing more competitive, leading to better interest rates for real estate investors seeking financing for their deals.

“I think another piece is that as (home) prices are rising, flippers are more in need of financing,” Blomquist said.

Baton Rouge is experiencing a ripple effect from catastrophic flooding that occurred there in August 2016. As these flooded homes went into foreclosure or were put up for sale, flippers came into themarket to buy them at distressed prices and are now flipping them for profits.

Natural disasters provide an opportunity for real estate investors to buy housing economically and flip it for profit while improving severely damaged neighborhoods in the process. There’s typically a delay in seeing these flipping numbers show up in property data.

Houston, which was devastated by Hurricane Harvey during August and September 2017, is an example of this trend. Flipping in Houston was down in the first quarter, according to ATTOM Data Solutions statistics, because of the time it takes to acquire, renovate and then flip a home. Blomquist, however, believes flipping numbers likely will rise in Houston before long. Miami is another large market that saw a double-digit decline in flips in the first quarter. The downturn could be related, in part, to damage from hurricanes Irma and Maria last fall and the delay that results in acquiring and renovating damaged property.

Further up the coast, Atlantic City, New Jersey, saw its flipping rate increase by 43 percent in the first quarter. Atlantic City is an interesting city to observe what is happening in terms of residential real estate investment. The city has struggled economically and has a high foreclosure rate, which likely is providing an opportunity for real estate investors to buy at distressed prices.

A Look Toward the Future

What does the future portend for fix and flip investors and the lenders that finance their deals?

Just as lenders have evolved since the housing crisis, so too have real estate investors. Blomquist notes that some real estate investors who were flipping homes have decided to move into new home construction. An example is Alex Sifakis. He’s the president of JWB Real Estate Capital, a real estate investment company based in Jacksonville, Florida, where the home flipping rate is down 7 percent compared to a year ago.

The company told ATTOM Data that it expects to flip about 200 homes this year but will build about 400. The majority will be in older neighborhoods where the company is buying teardowns or vacant lots.

This evolution is creating new opportunities for lenders who have been lending to the fix and flip market and are now open to lending on new construction. As flippers move into new construction, it’s advantageous for experienced borrowers to be able to rely on the same lender to finance new construction as well as their fix and flip deals.

Areas to Watch

The report showed that total flips were down 3 percent from a year ago to a two-year low, but the decline could be attributed to dwindling inventory.

The return on investment also dipped in the first quarter. The average gross flipping profit of $69,500 in first quarter 2018 translated into an average 47.8 percent return on investment compared to the original acquisition price. That’s down from 50.3 percent in first quarter 2017 to the lowest level since second quarter 2015—a nearly three-year low. This decline could have to do with rising home prices.

The number of entities flipping properties in first quarter 2018 dropped to 37,873 entities from a 10-year high in second quarter 2017 when nearly 45,000 entities were flipping. Tight inventory is likely a key reason for the recent decline, but there is a trend toward operators who can effectively manage multiple flips at a lower cost per flip and, therefore, can stay profitable at a lower gross profit per flip.

Going forward, we expect to continue to see rate compression making the cost of financing flips more favorable to all-cash deals and experienced flippers moving into the new construction arena.

]]>Sat, 27 Oct 2018 00:52:47 +0000https://patchofland.com/blog/all-projects/2018/10/27/investor-financing-heats-up/
https://patchofland.com/blog/all-projects/2018/10/27/investor-financing-heats-up/marketing@patchofland.com (Marketing)MarketingExpectations for future house flipping returnsFirst, the good news for house flipping: Average gross profits have risen steadily over the last few years.

As the 2018 house flipping report from research firm ATTOM Data Solutions shows, completed house flips in 2017 yielded an average gross profit of $68,143, representing a 49.8% return on investment. Gross profit is defined here as the difference between purchase price and flip price, not accounting for expenses incurred. In fact, the 2017 gross profit number was up 5% from the previous year’s $64,900 and represents a new all-time high.

The housing market’s steady rise in prices recently —which has contributed to strong house flipping profits—cannot continue forever. As a recent CNBC story points out, US house prices are rising at twice the speed of inflation and wages. Most analysts forecast this trend to continue for another year or so—but then expect increase in home prices will begin to slow down for the next several years.

The question is: how should this affect your expectations as a house flipping investor?

Does a Slowdown in Housing Mean Less Profits as a House Flipper?

It would be impossible, of course, to state definitively what a potential cooling-off period in the housing market will mean for the average return on a house flipping investment. MarketWatch recently reported, the current data gives us two reasons to remain optimistic about the future.

First, Richard Moody, the Chief Economist for Regions Financial, told MarketWatch that despite having passed the cyclical peak of existing home sales, the housing inventory has been shrinking for years. This means that demand will remain high and even a downturn in housing would not result in an all-out crash like the one in 2008, but simply “less upward pressure on prices.”

Second, according to Sam Khater, Freddy Mac’s Chief Economist, due to this years-long shortage of available housing, if there is a recession it will be a “modest, plain-vanilla recession. If that’s the case, I think what it might do is cause inventories to rise modestly and home price growth to slow. My base case is that: an economic recession but not a real estate recession.”

House Flippers Have Reason to Remain Optimistic Going Forward

If you are a house flipper or are interested in becoming one, the potential to earn strong returns on these investments, even if the housing market does slow down, remains.

As Freddy Mac’s Sam Khater explained, housing downturns are usually caused by an over-supply of housing stock. That is not the case we are seeing; in fact, nationwide we have been experiencing an extensive contraction in the housing supply.

Although it is logical to assume that eventually housing price increases will slow down nationally, the data does not indicate that you should expect a rapid, steep drop in prices in the foreseeable future.

Which means you might want to account for this shift and manage your expectations of record-breaking returns on your house flips going forward. Depending on your strategy and investment selections, we feel confident about the potential for healthy returns on these investments.

A Final Thought on Future Flipper Returns

When you’re ready to invest in a fix-and-flip property, there is a strong case for seeking financing from a private money lender, specifically one that is also a direct lender.

Because of less regulatory constraints relative to their traditional bank or mortgage counterparts, private money lenders can move much more quickly to get your house flip project funded. This will save you time and the hassles of a typical loan application.

With their own capital to lend, a direct lender can green-light your house flip in a matter of days. We all know that time is a major factor when purchasing investment property.

]]>Wed, 17 Oct 2018 00:54:22 +0000https://patchofland.com/blog/all-projects/2018/10/17/expectations-for-future-house-flipping-returns/
https://patchofland.com/blog/all-projects/2018/10/17/expectations-for-future-house-flipping-returns/marketing@patchofland.com (Marketing)MarketingHouse Flippers: An Interesting Strategy for Finding Your Next Real Estate InvestmentHouse flipping is more complicated than simply buying the first property you find that needs repair, giving it a cosmetic facelift, and then putting it back on the market at a higher price. As seasoned house flippers will tell you, this particular type of real estate investment requires the ability to identify the right property in the right market at the right time. You don’t want to choose a house in a region where home prices are falling, or where they’ve risen so rapidly, nor long enough that they’re going to remain stagnant.

But how can you as a real estate investor spot the signals that will indicate a given real estate market is ripe for the picking? According to one new study, you could always look for a Starbucks.

What a New Starbucks in Town Means for House Flippers

Based on 2018 research conducted by the Harvard Business School and reported on CNBC.com, when a new Starbucks opens in a given ZIP code, the median home price in that ZIP code will increase by .5 percent over the next year.

“Yelp measures of local business activity provide leading indicators for housing price changes and help to forecast which neighborhoods are gentrifying.”

Here’s another interesting data point. The Harvard study, which pulled much of its data from the restaurant-review website Yelp, found that “Yelp measures of local business activity provide leading indicators for housing price changes and help to forecast which neighborhoods are gentrifying.”

In other words, the opening of a new Starbucks location (or perhaps another high-end coffee chain), as well as restaurants with many Yelp reviews, can serve as an indicator that a neighborhood has potential for a house flipper—or possibly even longer-term real estate investments. This data helps to correlate\ near-term increases in median home prices with new, key retail establishments.

What’s the Connection, and What Does It Mean for Your Real Estate Investing?

Of course, the study’s authors are not suggesting that the opening of a new Starbucks itself directly affects the home prices in the surrounding neighborhood. Nor are they suggesting that residents will pay more for homes in certain areas because those local restaurants receive a lot of customer reviews on Yelp.

What they are saying, however, is that these data points can signal that the area is experiencing gentrification, which also suggests its home prices could increase.

According to one of the study’s authors, Harvard economics professor Edward Glaeser, “The presence of a Starbucks is far less important than whether the community has people who consume Starbucks. Consequently, we think that this variable is likely to be a proxy for gentrification itself.”

Although they can’t guarantee an increase in home prices—no data can ever guarantee an increase in home prices—here are a couple of reasons that the unveiling of a new Starbucks or new restaurants can suggest that a given real estate market might be viable for your next house flip:

Starbucks spends a lot of money conducting its own market research on the areas where it plans to open new locations, studying demographic and local economic trends. In those locations where Starbucks chooses to invest in a new store, they’ve clearly concluded that the area is enjoying some level of increasing prosperity.

Restaurants, like Starbucks, also invest heavily in demographic research before committing to a location in a given area. Their decision to invest in a new restaurant also suggests they’ve determined the area has a population with discretionary income for dining out—also an indicator that housing prices could remain strong, at least in the near term.

One Final Suggestion for Your Next House Flip

Is the Starbucks-Yelp strategy right for you? Will you use these data points as proxy research to assist you in locating your next real estate investment?

Whether you choose to do so or instead opt for a different research approach entirely, consider financing your next flip with Patch of Land. Over one-third of all flips in the U.S. last year were purchased with financing. Contact us and learn how to get your loan funded in as little as seven days. The team here at Patch of Land is here to help.

]]>Fri, 12 Oct 2018 22:16:09 +0000https://patchofland.com/blog/all-projects/2018/10/12/house-flippers-an-interesting-strategy-for-finding-your-next-real-estate-investment/
https://patchofland.com/blog/all-projects/2018/10/12/house-flippers-an-interesting-strategy-for-finding-your-next-real-estate-investment/marketing@patchofland.com (Marketing)MarketingPatch of Land is a Proud Sponsor of IMN's Single Family Rental Investment Forum (West)Patch of Land is proud to be a sponsor of IMN's 7th Annual Single Family Rental Investment Forum (West). The event will be held on December 3-5, 2018 at the JW Marriott Camelback Inn in Scottsdale AZ.

This industry-leading event will once again bring together key market participants including REITs, Funds, Aggregators, Fix and Flippers, Note Buyers, ABS & REIT Investors, and more than 2.5 days of lively discussion, thoughtful debate and countless networking opportunities.

As Single Family Rental investments continue to soar with multi-million securitization deals taking place on a monthly basis, and 1 in 9 homes now being single family rental properties in the United States, there has never been a better time to invest in this growing market.

Join your peers this December in Phoenix for another world-class meeting, and benefit from timely educational takeaways and extensive networking functions.

]]>Wed, 10 Oct 2018 23:02:18 +0000https://patchofland.com/blog/all-projects/2018/10/10/patch-of-land-is-a-proud-sponsor-of-imns-single-family-rental-investment-forum-west/
https://patchofland.com/blog/all-projects/2018/10/10/patch-of-land-is-a-proud-sponsor-of-imns-single-family-rental-investment-forum-west/marketing@patchofland.com (Marketing)MarketingPatch of Land to Attend AAPL's Annual Conference in Las VegasPatch of Land is looking forward to attending AAPL's Annual Conference on November 4-6, 2018 at Caesars Palace in Las Vegas, NV.

AAPL’s Annual Conference is one of the largest events dedicated to private lending; the conference provides strategic, industry-specific education, distinguished speakers, valuable sessions, unlimited networking engagements, and so much more for professionals across real estate servicing.

At the 2018 American Association of Private Lender’s (AAPL) Annual Conference this November, you’ll discover inspiration through association and build towards a better tomorrow.

Packed full of enlightening sessions with expert speakers and a variety of networking opportunities, AAPL’s Annual Conference is the only place to be if you want to learn new skills and broaden your horizons.

We hope to see you there!

]]>Wed, 10 Oct 2018 21:42:34 +0000https://patchofland.com/blog/all-projects/2018/10/10/patch-of-land-to-attend-aapls-annual-conference-in-las-vegas-2/
https://patchofland.com/blog/all-projects/2018/10/10/patch-of-land-to-attend-aapls-annual-conference-in-las-vegas-2/marketing@patchofland.com (Marketing)MarketingHow Legislation Can Move Fintech Into the Digital EconomyThe following article was originally featured in AAPL's Private Lender Magazine. It speaks on Congress strong interest in the fintech industry and was written by Patch's CMO, Robert Greenberg.

Congress has opportunities to address some of the challenges financial technology firms face in the lending sector.

The pace of financial technology innovation in the alternative lending space is nothing short of phenomenal, but it has meant headaches for lenders and vendors waiting for regulation to play catch-up.

Further complicating the issue, some matters involving the fintech sector cannot be addressed by regulatory agencies alone. They require a legislative solution through the U.S. Congress due to statutory issues or other limitations. Thankfully, Congress has taken a strong interest in the fintech industry, and it began work on some of these issues during the final two years of President Obama’s presidency—an effort that has continued under the Trump Administration.

While much of what is happening in Congress feels partisan and politicized, that hasn’t been the case with fintech issues. There have been numerous opportunities for bipartisan solutions.

The Milken Institute launched a fintech program in 2014 that called for new regulatory approaches to deal with innovative tech-savvy companies that operate differently from the traditional banks of old. Milken noted that fintechs were cutting across financial silos and advancing rapidly in areas such as mobile banking, but they were still dealing with a regulatory apparatus built from the depths of the Great Depression.

The Evolving Landscape

The first real regulatory response to the dawning of this new era of fintech came in 2007 and 2008. That’s when the Securities and Exchange Commission (SEC) classified the promissory notes that Prosper and Lending Club offered to the general public as unregistered securities. This action was believed to be the SEC’s entrance into regulating peer-to-peer lenders. From 2010 to 2015, federal regulators also began increasing their attention on fintech companies as the number of businesses operating in the space exploded.

Several other things were occurring around the same time. In 2012, the Consumer Financial Protection Bureau launched Project Catalyst to encourage consumer-friendly innovation in the financial products and services arena. In 2016, the U.S. Department of the Treasury published a white paper called “Opportunities and Challenges in Online Marketplace Lending” to provide an overview of the evolving market. One of the issues the Treasury’s report addressed was the need for regulators to provide additional clarity around the roles and requirements for fintech lending participants.

Also, in 2016, the U.S. Office of the Comptroller of the Currency (OCC) released a white paper detailing the framework to support responsible innovation. The OCC defines responsible innovation as “the use of new or improved financial products, services and processes to meet the evolving needs of consumers, businesses and communities in a manner that is consistent with sound risk management and is aligned with the bank’s overall business strategy.”

The OCC followed up that effort with a white paper covering special purpose national bank charters for fintech firms. More recently, in March 2018, it held an inaugural “listening session” at its Chicago office that involved 30 to 40 people who discussed emerging issues, trends and current events concerning responsible innovation. This included banks and nonbanks talking about partnerships and third-party risk management.

Hitting the Halls of Congress

While regulators have taken actions related to the advances of tech-driven lending, some issues require a legislative solution. Lawmakers, especially those in the House, have held multiple hearings between 2015 and 2017 on fintech-related topics, including mobile payments, peer-to-peer lending, digital currency, blockchain, the JOBS Act and online lending’s role in improving access to small business capital.

From January 2015 to December 2017, the Milken Institute uncovered 71 fintech-related legislative bills. More than half of them received bipartisan support, but it should be noted that it’s been challenging to advance many of these bills. In September 2016, the House passed H.R. 835 promoting a national policy to encourage financial technology innovation, while at the same time protecting consumers’ personal information. Still, such resolutions lack the weight of actual legislation.

Perhaps the most impactful legislation in recent years for alternative lenders has been the JOBS Act, which passed with bipartisan support in 2012 and was signed into law by President Obama. Some provisions took effect immediately, but others required SEC rulemaking. It took the SEC more than three years to pass final rules for the equity crowdfunding provisions under Title III, and those didn’t take effect until May 2016.

Lawmakers in the current 115th Congress have introduced a number of fintech bills, including several that affect the alternative lending space.

Alternative Lending Evolution

The digital lending space has evolved from its peer-to-peer roots with the infusion of institutional investor interest and competition. The space saw significant growth from 2010 to 2015 and has evolved from the days when it saw itself as an alternative to banks in a post-financial crisis where many traditional banks were lending only to the most creditworthy customers. Today, that “us versus them” mentality has faded, and it’s not unusual to see online fintech lending platforms collaborating with traditional banks or with institutional investors.

Under this traditional bank-fintech partnership model, online alternative lenders partner with an issuing depository institution to originate loans. After origination, they buy the loans for sale to investors. The National Bank Act and the Federal Deposit Insurance Act (FDIC) give national banks and state-chartered banks the ability to charge interest rates based on the laws of the state in which the bank, not the customer, is located. But neither Act applies to nonbank platforms, a disadvantage for fintech lenders. Thus the partnerships have been advantageous to this new lending model.
Despite tacit approval from the FDIC and OCC, the Milken Institute notes that this bank partnership model is facing increased litigation risk and objections from consumer advocates and state regulatory authorities. As a result, one of the legislative issues at hand is to address “value when made” (if the loan is nonusurious when made, it remains nonusurious throughout the loan’s lifecycle) and the true lender issue.

Some believe that the partner bank that is originating the loan and selling it to the fintech lending platform under this model is not the “true lender,” given the very small amount of time—which could be as short as a day—the loan remains on the bank’s book. Milken notes that courts have been divided on this issue, leading to uncertainty and lending declines in certain markets where courts have been adverse to the fintech-depository bank partnership model.

According to the Milken Institute: “If a nonbank fintech lender is found to be the ‘true lender,’ they would lose the exportation advantage that fintech lenders currently rely on to market their products and services and could be subject to penalties for violating state usury laws. The uncertainty from recent litigation has resulted in certain platforms changing their models to protect against ‘true lender’ concerns.”

This litigation has threatened the fintech-bank partnership model, which Milken views as approved via updated third-party guidance provided by the FDIC and OCC. Bipartisan legislation has been introduced that would protect this model, where banks and fintechs are able to leverage each others’ strengths to meet the credit needs of their customers while providing a uniform, national market for credit.

The Milken Institute also supports filed legislation on the following issues:

Expanded and improved mobile-device banking // Bipartisan legislation has been introduced that addresses the opening of accounts through a mobile device. It would ensure privacy, but allow financial services providers to, with certainty, leverage technological innovations to expand services and maintain relationships with their customers. The legislation would help deal with “banking deserts”—areas with inadequate financial services that make residents vulnerable to predatory lenders that have cropped up since the financial crisis.

Enable the reporting of alternative data to expand access to credit // Fintech companies have developed advanced algorithms to determine whether a potential borrower is a good credit risk. Certainly, such algorithms come with risks, such as whether a particular borrower can withstand a broad economic downturn. The Milken Institute recommends a bipartisan legislative effort to encourage the reporting of alternative, positive payment information to the credit bureaus.

Develop big data reporting standards // Several bills have been introduced that would require the U.S. Treasury Department to develop common data reporting formats that financial regulators would be required to adopt. Common reporting formats could reduce or remove reporting silos among regulated entities, eliminate duplicative reporting and save time and money for regulators and regulated entities. “Despite the hype regarding big data, it is useless unless the person or organization receiving terabytes of information is able to effectively collect, sort and disseminate it,” Milken notes.

Require the IRS to automate certain data collection // IRS Form 4506-T allows a mortgage borrower to request their tax return or have it sent to a third party, such as a lender, but the process can take several days. Automation could make this occur in near real time—speeding up the mortgage underwriting process. Several bipartisan bills have been introduced to address this issue.

Other Issues on the Horizon

There are a host of other fintech issues affecting alternative lenders that Milken didn’t address in its white paper, but they are issues that lenders will want to watch. These issues involve customers’ financial data, regulatory sandboxes, fintech charters and outdated credit scoring models currently used in obtaining a mortgage.

Several of these issues have been quite contentious, including the OCC’s proposal for national fintech charters.

“Lawmakers have also raised concerns with efforts undertaken by certain fintech firms to apply for an industrial loan charter (ILC) from the FDIC. In recent months, SoFi and Square both applied for an ILC, setting off a raucous debate over whether fintechs should even be allowed to apply for an ILC,” the Milken white paper notes.

Many opportunities will exist this year for Congress to address some of the challenges financial technology firms face in the lending sector. The current bipartisan interest in fintech is a positive sign that lawmakers will reach across the aisle with solutions that will provide greater regulatory and legislative certainty and clarity to the nation’s vibrant and still-growing alternative lending sector.

As our world moves more deeply into a digital economy, Congress must take action to keep pace with the speed of innovation with updated and commonsense regulation that offers flexibility for fintech lending platforms and encourages them to continue innovating in the lending sector, while providing robust consumer protections.

]]>Fri, 05 Oct 2018 21:16:57 +0000https://patchofland.com/blog/all-projects/2018/10/05/how-legislation-can-move-fintech-into-the-digital-economy/
https://patchofland.com/blog/all-projects/2018/10/05/how-legislation-can-move-fintech-into-the-digital-economy/marketing@patchofland.com (Marketing)MarketingPatch of Land to Attend Pitbull's 47th National Hard Money ConferenceThe Pitbull Conference is the oldest and largest organization of its kind in the country: educating brokers, lenders, and investors as to the emerging opportunities that exist in hard money lending.

Their success can be attributed to their track record of consistently producing quality events for industry professionals to network and grow their businesses. They take great pride in the lasting relationships they have cultivated over time with both sponsors and attendees.

Their mission is to help facilitate the ease of which any hard money privately financed transaction might occur. They connect borrowers to brokers, brokers to lenders and fund managers to investors at their live events and through their online directory. They also provide important information regarding changing marketplace conditions and industry standards.

This year, Patch of Land is excited to be attending the event in Austin, Texas.

Event Description:

A two-day event for real estate professionals.

Presentations on a wide range of topics pertaining to real estate based private money financing.

Exceptional speakers representing all facets of the industry–providing on point and insightful commentary.

To learn more and register for this year's Pitbull Conference in Austin, click here.

]]>Mon, 17 Sep 2018 22:10:17 +0000https://patchofland.com/blog/all-projects/2018/09/17/patch-of-land-to-attend-pitbulls-47th-national-hard-money-conference/
https://patchofland.com/blog/all-projects/2018/09/17/patch-of-land-to-attend-pitbulls-47th-national-hard-money-conference/marketing@patchofland.com (Marketing)MarketingJoin Us At The NACLB Conference Patch of Land will be attending the National Alliance of Commercial Loan Brokers on October 16th through 18th at the Trump National Doral in Miami, FL.

Don’t miss out on being part of Miami’s largest mortgage event for loan origination professionals, bringing together hundreds of mortgage brokers, loan originators and bank and credit union lending officers from throughout the region for an event full of education, networking and fun.

So register today to be part of Miami’s largest and most exciting conference and trade show for LO pros.

]]>Fri, 14 Sep 2018 18:01:53 +0000https://patchofland.com/blog/all-projects/2018/09/14/national-alliance-of-commercial-loan-brokers/
https://patchofland.com/blog/all-projects/2018/09/14/national-alliance-of-commercial-loan-brokers/marketing@patchofland.com (Marketing)MarketingMake Money on Flips Without Swinging a HammerMost of us likely think of fix-and-flips as investment deals that require renovation know-how or at least the ability to hire skilled contractors with that knowledge.

The truth is that today’s fix-and-flip residential housing market is far broader than that. In fact, savvy real estate investors don’t even have to shop around for the right house to buy, rip up flooring, paint or even break a sweat to make money in residential real estate.

You can bypass a key challenge that many current residential fix-and-flip investors face: dealing with a severe shortage of affordable inventory. How can you earn a similar return without the angst of finding a house and rehabbing it? By investing in other real estate developers’ projects via Patch of Land's investing platform.

Patch of Land provides an online platform where accredited and institutional investors seeking high-yield, short-term, asset-collateralized investments can discover properties that meet their investment goals. Borrowers seeking timely and consistent sources of funding for renovating and flipping properties have contracted with Patch of Land to provide their financing, and we offer a select group of these properties to our investors.

Investors on Patch of Land’s platform are currently earning up to 12% and receive monthly interest payments on their investments directly into their online accounts.

Sign up on the platform. It’s quick, free and doesn’t require any commitments.

Select the real estate deals in which you want to invest. You can build your investment portfolio from curated, pre-screened real estate projects and can view full financials, photos, appraisals, and documents to help you decide.

Invest. It’s as easy as clicking the “Sign Up Now" button on the Investment Detail page and entering your funding amount.

Upon project completion, the borrower repays the funds to Patch of Land and we pay the investor. You can either choose to reinvest in another project or withdraw your earnings.

As you see, fix-and-flip is not all about hammers and paint. It’s time to start thinking about real estate investing in new ways. We aren’t all wired the same way. Some of us have the desire and the skills to spot a fixer-upper, to submit an appropriate bid and to hire out or do the rehab ourselves.

Others of us may have full-time careers, yet we desire to diversify our financial portfolios with residential real estate investments. Online platforms such as Patch of Land now offer a highly sophisticated yet easy-to-use method to make that possible.

Have questions? Connect with us at investors@patchofland.com. We look forward to helping you find your next real estate investment.

]]>Fri, 14 Sep 2018 17:37:50 +0000https://patchofland.com/blog/all-projects/2018/09/14/make-money-on-flips-without-swinging-a-hammer/
https://patchofland.com/blog/all-projects/2018/09/14/make-money-on-flips-without-swinging-a-hammer/marketing@patchofland.com (Marketing)MarketingPatch of Land to Attend the Colorado Mortgage SummitPatch of Land will be attending the Colorado Mortgage Summit at the Denver Marriot Westminster in Denver, CO on October 2, 2018.The Colorado Mortgage Summit presents an incredible lineup of educational sessions, business opportunities, and networking events curated specifically for the entrepreneurial men and women of the Colorado mortgage industry. Join your peers at Colorado's largest gathering of mortgage pros! Here's a look at some of the topics:

]]>Fri, 14 Sep 2018 00:56:40 +0000https://patchofland.com/blog/all-projects/2018/09/14/patch-of-land-to-attend-the-colorado-mortgage-summit-2/
https://patchofland.com/blog/all-projects/2018/09/14/patch-of-land-to-attend-the-colorado-mortgage-summit-2/marketing@patchofland.com (Marketing)MarketingA Solution For Fix-and-Flip Investors Facing Today's Tightening Housing SupplyPatch of Land's CMO, Robert Greenberg, is a member of the Forbes Real Estate Council and recently shared his thoughts on new development opportunities for Fix and Flip investors. With a tightening housing supply, and increased demand, what are investors to do? See what Robert has to say on why real estate investors are starting to look at new construction as an alternative to renovating properties. Below is an excerpt from the piece, but read the complete article in Forbes.com!

"My company works with fix-and-flip investors every day, and one of the most common challenges we hear from borrowers is the difficulty in finding viable investment properties to purchase. As Reuters reported in early 2018, housing inventory across the U.S. fell for 31 straight months through the close of 2017. And recent forecasts suggest homebuyers will continue to face a tight housing supply throughout the rest of 2018.

So, what’s an investor to do? How can you find investment properties in a housing market with limited inventory — where you’re competing not only with buyers looking for a primary residence, but also with other real estate investors? A statistic in that same Reuters report offers a clue to one possible strategy: In December 2017, permits approved for new construction of single-family homes reached their highest level in a decade."

]]>Wed, 12 Sep 2018 20:39:12 +0000https://patchofland.com/blog/all-projects/2018/09/12/a-solution-for-fix-and-flip-investors-facing-todays-tightening-housing-supply/
https://patchofland.com/blog/all-projects/2018/09/12/a-solution-for-fix-and-flip-investors-facing-todays-tightening-housing-supply/marketing@patchofland.com (Marketing)MarketingIs a Transit-Oriented Development a Good Area for Your Next Flip?What is a Transit-Oriented Development?

Before we explain why a transit-oriented development might be a smart market for your next flip, let’s define this type of development.

A transit-oriented development is a vibrant, walkable urban community with a mixture of housing, offices, retail shops, dining, entertainment, and other amenities—all centered around reliable public transportation, often a rail system.

What’s the Goal of Transit-Oriented Developments?

The idea behind this type of development is to create a community where people can live, work, play, and raise a family without the traffic, congestion, long commute times, and added expenses of owning a car.

What’s Behind the Growing Popularity of These Developments?

Why are transit-oriented developments becoming so widespread? For one thing, they have active governmental support and encouragement. A report published by the EPA cites research showing that transit-oriented developments emit 43% fewer emissions than comparable suburban developments. This is because many of their residents choose to commute by train, on foot, or favor bike-riding over driving cars to work.

The Federal Transit Administration (FTA) is also actively encouraging transit-oriented developments, with programs to offer cities financial and technical assistance and other resources for their development projects.

As a 2017 story from the National Association of Realtors® points out, transit-oriented developments are driving new investment because these communities offer many benefits, including:

Putting undeveloped and underdeveloped properties to more productive uses

Slowing the pace of urban sprawl

Reducing traffic congestion

Contributing to sustainability through less reliance on cars

And finally, transit-oriented developments are growing in popularity because they fit the lifestyle preferences of Millennials, the largest generation in US history. As research on transit-oriented developments from Florida Atlantic University explains, 51% of Millennials prefer living in attached housing where they can walk to shops. The report also notes that while 32% of Millennials say they walked to work or school, while only 19% of Generation X and just 13% of Baby Boomers said the same.

They have a very specific vision for their lives—a vision often centered around being able to walk, not drive, to the places that matter to them, or easy access to high-quality public transportation.

What This All Means for Your Next Investment

Okay, we’ve established that transit-oriented developments benefit the people who live and work there. But what does this have to with where you find your next property to flip?

Think of it this way. People interested in living in or near a transit-oriented development are a highly discerning subset of the population. They have a very specific vision for their lives—a vision often centered around being able to walk, not drive, to the places that matter to them, or easy access to high-quality public transportation.

Which is why, as infrastructure solutions firm HNTB found in its study, 55% of Americans would pay a higher rent or mortgage to live in an area where they could get access to places for work or play without having to drive to them.

Finally, research from the TOD Index points out that in December 2017, the average home value in a transit-oriented development ($636 per square foot) was nearly four times the value of the average home in the United States ($164 per SF).

And that’s why you might want to look into transit-oriented developments when looking for your next investment home to flip. As always, the team at Patch of Land is here to help fund your property when you find it.

]]>Fri, 07 Sep 2018 20:07:02 +0000https://patchofland.com/blog/all-projects/2018/09/07/is-a-transit-oriented-development-a-good-area-for-your-next-flip/
https://patchofland.com/blog/all-projects/2018/09/07/is-a-transit-oriented-development-a-good-area-for-your-next-flip/marketing@patchofland.com (Marketing)MarketingThe Future of Lending is Through Automation and AIThe following article was originally featured in the monthly magazine for Originate Report. It speaks to the growing interest in automation and artificial intelligence in the lending industry. Written by Patch's CMO, Robert Greenberg.

When mortgage professionals gather for an industry conference it’s usually not long before someone jokes (or moans) about how slow the industry moves when it comes to adopting new technology.

Technology, however, is now more than just a topic of conversation. It’s a must-have for mortgage originators, and the industry can thank fintech firms for challenging the status quo and speeding up adoption.

The National Bureau of Economic Research (NBER) has tracked the transformation toward technology-based lending. The market share of U.S. mortgage lending held by technology-based lenders grew from 2% in 2010 to 8% in 2016. During the same time period, online mortgage lenders saw total loan originations rise to $161 billion, up from $34 billion — an annual growth rate of 30 percent. NBER’s research shows that on average fintech lenders process mortgage applications about 20 percent faster than their traditional counterparts.

While change can sometimes be hard, technology advances in the mortgage sector have been good for both consumers and originators, and the technological evolution will continue to benefit both borrowers and lenders in the years ahead.

In a year where the overall mortgage volume is expected to be down compared to last year, the interest in automation and artificial intelligence is growing as companies seek to add efficiencies to improve their competitive position.

The Mortgage Bankers Association expects 2018 originations will reach $1.16 trillion, according to its July updated mortgage finance forecast, down from 2017’s $1.71 trillion.

Purchase originations (one- to four-family units) are expected to rise by nearly 4 percent to $1.15 trillion, but that won’t be enough to offset a forecasted 23 percent decline in refinances to $460 billion. Refinances currently make up 29 percent of the mortgage market, down from 35 percent in 2017, due to a rising-interest-rate environment.

Why automation matters

The declining mortgage volume and the challenges it represents comes as the nation enters a maturing e-commerce market — one in which consumers have come to expect the immediacy they find in the online retail sector to transfer to the mortgage industry.

Originators have responded to this demand with an improved application experience that includes mobile apps, online applications and e-verification options that reduce the time commitment and paperwork gathering of the past.

While online fintech companies should get significant credit for pushing technology forward for the entire origination industry, mortgage giant Fannie Mae also advanced technology adoption among lenders with the rollout of its Day 1 Certainty initiative in October 2016.

The initiative frees originators from paper-based processes with automated validation of income, assets and employment. The benefits of Day 1 Certainty have been multifold for originators who have adopted it: A faster paperless process, increased accuracy, a better borrower experience, faster closings, the ability to close more loans, and freedom from representations and warranties. Since the initial rollout, Fannie Mae has continued to add technology vendors to their platform.

Day 1 is just one example of multiple technology-related initiatives undertaken by the agencies over recent years. Several years ago, Fannie Mae and Freddie Mac adopted the Uniform Collateral Data Portal, where lenders electronically submit appraisal reports for mortgages delivered to the agencies. At the time there was much handwringing about how this technology would affect lenders, but today it has become standard procedure.

Ultimately, technology as a whole should be helping originators grow their businesses while improving efficiencies and containing costs. A McKinsey report refers to automation in the banking sector as a “transformative power” for the industry.

“Many banks are rushing to deploy the latest automation technologies in the hope of delivering the next wave of productivity, cost savings, and improvement in customer experiences,” the report notes. “While the results have been mixed thus far, McKinsey expects that early growing pains will ultimately give way to a transformation of banking, with outsized gains for the institutions that master the new capabilities.”

While McKinsey speaks specifically about banking, the sentiment is certainly transferable to mortgage originators of all types, including alternative lenders and fintechs.

How to adapt

McKinsey expects a second wave of automation and artificial intelligence to emerge in the next few years, estimating that machines will do 10 to 25 percent of the work across bank functions. This, in turn, will free up employees “to focus on higher-value tasks and projects,” the report says. Capturing this opportunity requires a shift from a tactical to a strategic approach.

“In some cases, they will need to design new processes that are optimized for automated/AI work rather than for people, and couple specialized domain expertise from vendors with in-house capabilities to automate and bolt in a new way of working,” the report said.

Figuring out AI complexities

When it comes to artificial intelligence, gathering data and automating the origination process may be the first step, but leveraging the data insights to benefit lenders and borrowers is paramount.

Originators will need to figure out how to use the data in a way that drives value. There are many complexities to be considered including how the data is collected, how it is used and, very importantly, how to remain secure and compliant with mortgage regulations.

Some old-school origination shops may need to start with the process by further digitizing their workflow before they can capture significant consumer data for analysis and use.

This is no easy task. Data that is captured isn’t going to be useful unless someone can analyze it and figure out how it can be seamlessly used to add value by improving efficiency, cutting costs, reducing risks and so on.

There aren’t easy answers to the many questions that arise when the conversation turns to technology in origination, and specifically to automation and AI. How much should be automated? Should we rely on proprietary in-house technology, outsourced solutions, or a combination of both? Can we add new solutions to our existing LOS? How will AI take what it has learned and improve future performance? How will blockchain change today’s business process and improve security?

These aren’t questions that can be answered overnight, but they are certainly questions that originators need to be talking about and acting upon with a level of urgency. Whether the conversations begin at an industry event or around a company’s conference room table, it is time to move from talk to action as end users increase their demand for speed and efficiency in the origination process.

ABOUT THE AUTHOR

Robert Greenberg is the Chief Marketing Officer at Patch of Land responsible for branding, corporate communications, lead generation and managing the integrated marketing activities. His background includes over 25 years in marketing working with familiar consumer brands such as Pepsi-Cola, Anheiser Busch and Sara Lee as well as B2B experience in retail, technology, finance, and real estate.

]]>Fri, 31 Aug 2018 21:23:37 +0000https://patchofland.com/blog/all-projects/2018/08/31/the-future-of-lending-is-through-automation-and-ai-2/
https://patchofland.com/blog/all-projects/2018/08/31/the-future-of-lending-is-through-automation-and-ai-2/rgreenberg@patchofland.com (Robert Greenberg)Robert GreenbergTech-Driven Crowdfunding Sites Lower Barriers to CRE InvestmentThe following article was originally featured in the quarterly newsletter for CREW. It speaks to the importance of technology in CRE - especially by crowdfunding sites that are allowing more investors to enter the commercial investment space. Don't miss the quote from Patch's CMO, Robert Greenberg.

Tech-Driven Crowdfunding Sites Lower Barriers to CRE Investment

Until a few years ago, investing in commercial real estate was largely limited to big institutions, hedge funds, and high-net-worth individuals. Wealthy investors relied on word of mouth within their elite networks to access quality real estate investments, and participation typically required a minimum investment of $50,000–$100,000.

But this “country club” model of real estate investment began to shift in 2012 when Congress passed the JOBS (Jumpstart Our Business Startups) Act, which enabled small retail investors to enter the CRE market. Since then, dozens of so-called crowdfunding companies have emerged offering individual investors an opportunity to pool their resources to invest in commercial properties via online marketplaces.

While all these companies operate differently, using different platforms and parameters, they are all powered by innovative new technologies designed to increase efficiency and reduce costs for both investors and borrowers.

“Our mission is to connect capital with opportunity so that we can unlock the massive growth potential of the commercial real estate market,” said John Minervini, content manager at San Francisco–based RealtyShares (realtyshares.com), one of the earliest and largest players in the real estate crowdfunding sector, with 120,000 registered users across all 50 states.

“Our proprietary technology and workflow management tools support our team of experienced real estate professionals so that they can evaluate transactions at greater scale and levels of discernment. Our unique marriage of AI and machine learning allows us to more efficiently source quality projects and streamline the underwriting process.”

Real estate crowdfunding sites operate similarly to e-commerce sites, with all transactions done electronically. Investors can go online, sign up, and begin shopping for properties within minutes. The platforms are designed to be easy to use and intuitive, and require little or no specialized knowledge.

“It’s a lot like buying a book on Amazon, but instead of buying a whole book, you can buy a chapter,” said Robert Greenberg, chief marketing officer for Patch of Land (patchofland.com), a real estate crowdfunding site based in Los Angeles. “We pool capital from individuals to invest in the types of projects that in the past were the realm of wealthy insiders and hedge funds.”

In addition to providing access to a market once reserved for the rich, crowdfunding sites also promise significantly higher returns— anywhere from 8 to 13 percent per year, depending on the platform and the project—than those provided by real estate investment trusts (REITs) or other traditional investment vehicles. And unlike REITs, where investors buy into a pool of properties, crowdfunding sites allow users to invest in individual projects.

Crowdfunding sites also offer advantages to builders and developers. Unlike loans from banks, which operate under stricter regulatory control and typically take months for a decision, a loan from a crowdfunding site can be executed in a matter of weeks—although interest rates are generally higher. “As long as we think our crowd has an appetite for a deal, we will make the loan,” said Patch of Land’s Greenberg.

“It’s a lot like buying a book on Amazon, but instead of buying a whole book, you can buy a chapter.”

—Robert Greenberg, CMO, Patch of Land

Crowdfunding sites are clearly democratizing real estate investment, but they are not necessarily open to the average Joe and Joanne. Many sites—including Patch of Land and RealtyShares— require investors to be accredited, which means they must have a minimum net worth of $1 million, excluding their primary residence, or have reported income of at least $200,000 each year for the last two years.

Patch of Land and RealtyShares post new deals on their sites several times a week. Users can then select the projects they want to invest in based on their personal preference, investment goals, appetite for risk, asset class, location, and other criteria.

Patch of Land focuses on the lower end of the market, providing loans ranging from $100,000 to $3 million. A typical borrower might be a developer who purchases a rundown apartment building, hotel, or self-storage facility, rehabs it, and quickly sells it for a profit. “Our deals typical sell out within hours or days,” Greenberg said. RealtyShares focuses on the middle market, funding commercial projects with a value of up to $50 million.

Since the company was founded in 2013, $730 million has been invested through its platform in more than 1,100 projects across 39 states.

As with all forms of real estate investment, caveat emptor applies to crowdfunding sites. While the promised returns are typically higher, so are the risks. Unlike publicly traded REITs, which eschew high leverage, own vast portfolios of property, and are watchdogged by Wall Street analysts and asset managers, crowdfunding sites operate under less stringent rules. Indeed, one expert on real estate finance characterized crowdfunding sites as “the wild, wild West” of real estate investment.

Still, the best-run sites carefully curate deals and vet sponsors. Realty Mogul (realtymogul.com), for example, another Los Angeles–based crowdfunding site, conducts background, criminal, and credit checks on each funding applicant and reviews his or her historical deal flow, liquidity, and success. The site’s head of credit has three decades of experience in real estate finance.

Both Patch of Land and RealtyShares say they carefully evaluate every deal they offer investors to minimize their risk and maximize their returns, and both companies underwrite the deals they present to investors.

“We underwrite every deal we make, and we won’t underwrite a project that doesn’t meet our criteria,” said Patch’s Greenberg. “If we made the loan, we like the project. We did the due diligence.” But, he was quick to add, “that doesn’t mean that every deal is a good fit for every investor. They have to do their own due diligence.”

Greenberg said very few of Patch of Land’s deals have gone sour, and even if they do, the company has safeguards in place to ensure that investors recoup their original investment. All loans are secured debt, and the company always owns the first lien on the property. “We’ve returned every dime of principal to investors on our site.”

Minervini said RealtyShares accepts less than 10 percent of the projects it reviews: “We are discerning about the investment opportunities we present to our investors.”

Real estate crowdfunding generally focuses on debt financing, whereby investors receive monthly or quarterly distributions from the interest paid by the borrower. However, a growing number of crowdfunding sites are entering the equity market, whereby investors acquire a stake in a property and earn returns through rental revenue rather than through interest on a loan.

Patch of Land takes pride not only in making money for its investors but also in building communities and financing projects that are often overlooked or rejected by banks and other traditional lenders. The company has invested in Detroit, the South Side of Chicago, and other economically distressed areas.

“We’re not a nonprofit,” Greenberg concedes, “but we believe we can democratize the availability of capital so that people who want to do good can do good.”

]]>Mon, 27 Aug 2018 21:27:37 +0000https://patchofland.com/blog/all-projects/2018/08/27/tech-driven-crowdfunding-sites-lower-barriers-to-cre-investment/
https://patchofland.com/blog/all-projects/2018/08/27/tech-driven-crowdfunding-sites-lower-barriers-to-cre-investment/marketing@patchofland.com (Marketing)MarketingHome Flipping at 11-Year High; Financed Flips at 9-Year HighHome flipping rose in 2017 to its highest level since 2006 and the percentage of flips using financing also reached a nine-year high.

The percentage of flips completed with financing could signal more interest from real estate investors as the lending market for fix-and-flip real estate investors matures with competitive interest rates that more closely resemble buying with cash.

This maturation of the flipping market, coupled with rising home prices, means real estate investors who want to expand their portfolios with multiple simultaneous purchases and may not have enough cash to fund all the transactions they desire might be turning to financing to help expand their portfolios.

ATTOM Data reports that 207,088 U.S. single-family homes and condos were flipped in 2017, up 1% over 2016 numbers. They report that 34.8% of flips last year were completed with financing, a significant increase from 31.6% in 2016.

Over One-Third of All Flips Purchased with Financing

Flips purchased with financing were at their highest level since 2008. This nine-year high comes as crowdfunders and online lenders like Patch of Land cater to a market that has been largely ignored by traditional lenders and big banks.

The total dollar volume of financed home flip purchases reached an 11-year high in 2017 — $16.1 billion, up from $12.7 billion in 2016, and the highest since 2007. The days where cash is king certainly aren’t over, but financing flips continues to attract a larger share of the total market.

Among 52 metropolitan statistical areas with at least 1 million people that were analyzed in the report, those with the highest percentage of flips purchased with financing were Denver (55.45%); Boston (52.8%); Providence, Rhode Island (49.4%); San Diego (48.5%); and Seattle (48%).

Average Gross Profit from Flips Near All-time High

There is plenty of good news for real estate investors in the report. The average gross flipping profit of $68,143 in 2017 provided an average 49.8% return on investment, the second highest gross flipping ROI since ATTOM began collecting data in 2000. The average gross profit in 2017 was just slightly off from the all-time high average reached one year earlier (in 2016), with a 51.9% percent return.

Among the larger metros (with populations of more than one million), Memphis (12.8%), Las Vegas (9.1%), Tampa/St. Petersburg (9.0%), Birmingham (8.6%), and Phoenix (8.5%) registered the highest number of flips relative to total home sales. Of this same group, the best returns were found in Pittsburgh, Philadelphia, Cleveland, Baltimore, New Orleans, Cincinnati, and Buffalo, all reporting ROIs of over 80%.

Among the smaller markets, Pennsylvania had four of the five markets showing investors the best returns. The top five smaller markets were Scranton, Pennsylvania (168.2%); Pittsburgh, Pennsylvania (145.5%); Baton Rouge, Louisiana (122.9%); Philadelphia, Pennsylvania (115.7%); and Erie, Pennsylvania (114.1%).

Addressing Challenges

The low levels of inventory in many markets coupled with rising home prices will continue to challenge real estate investors, potentially affecting the number of flips as well as profitability.

One of the factors driving the increase in flips completed with financing is the impact that alternative lenders are having by providing borrowers access to lower cost capital by providing more competitive rates. In addition, the maturation of the flipping market suggests that flippers who want to expand and may not have enough available cash to fund all the deals they want to do are now turning to financing.

At Patch of Land, the majority of our customers are experienced flippers and we are seeing an increase in the number of borrowers coming to us for financing. We are seeing some investors that previously had success completing only one or two flips per year are now wanting to do 5 to 10 flips a year, but they need financing to help fund the acquisition of more projects, some of which are going on simultaneously.

The report also noted that flips to FHA buyers dropped to 17.6% in 2017 from 19.4% in 2016 with some speculation that flippers are opting to buy/flip/lease and then sell back to real estate investors interested in holding property as single-family rentals.

Robert Greenberg is the Chief Marketing Officer at Patch of Land responsible for branding, corporate communications, lead generation and managing the integrated marketing activities. His background includes over 25 years in marketing working with familiar consumer brands such as Pepsi-Cola, Anheiser Busch and Sara Lee as well as B2B experience in retail, technology, finance, and real estate.

]]>Tue, 17 Apr 2018 16:44:04 +0000https://patchofland.com/blog/all-projects/2018/04/17/home-flipping-at-11-year-high-financed-flips-at-9-year-high/
https://patchofland.com/blog/all-projects/2018/04/17/home-flipping-at-11-year-high-financed-flips-at-9-year-high/rgreenberg@patchofland.com (Robert Greenberg)Robert Greenberg5 Ways to Increase the Number of Flips You Do Each YearIf there’s one thing that experienced fix and flip investors know, it’s that having a pipeline of business —a steady stream of flips— is a necessity to make your business sustainable. Not every flip will be the big win you anticipate it to be, so increasing the number of flips you do each year can ensure that you’re always on the right track to positive gains. But, how do you add a new surge of energy to your business and increase the number of flips you do each year?

Here are a few best practices that can help:

Streamline Administration

Don’t you hate it when a simple task, like posting to social media or making a couple of phone calls, sucks away half of your day? Time is money, and you have to find a good way to leverage it. Streamlining administration processes can make a huge difference. Getting organized and simplifying repeated tasks can save you a tremendous amount of time, which means you can focus on other more important tasks, like finding another good flip. For example, you could schedule your social media posts in advance by using a social media management platform. Save time on every project by developing a list of rehab costs for your area that you can use to price improvements. Create standard fill forms that reflect the information required by lenders so that you can easily gather information as you evaluate properties.

Find a Strong Group of Suppliers

Like it or not, your suppliers are your business partners. You depend on them to provide the materials you need on time, every time. You should be able to trust them to provide you with reasonable prices and great service so that you don’t have to make a bunch of phone calls to find just the right light fixture or front door. Those repeated phone calls to place or check on your orders are nothing but time wasters. A strong group of suppliers is vital to streamlining your business and increasing the number of your flips each year.

Hire Reliable Employees

Just like a strong group of suppliers is imperative to having a successful flipping business, so are reliable employees. A good employee is a treasure that should be cultivated and appreciated. They can save you an enormous amount of time and frustration by covering for you when you’re busy, coming up with great ideas, and helping you be successful. Provide them with fair pay, strong leadership, and a clear career path and you’ll have their loyalty for life.

Perfect the Art of Cost and Timeline

Estimating the cost of the project and projected timeline accurately can make or break your next flip. In a business where time is money, perfecting the art of cost and timeline can mean you have more money (and time) to add flips to your calendar. One way to do this? Find a contractor that you trust —one that can come out to properties in advance of purchase so you can accurately estimate costs and timeline.

Develop Relationships with Lenders

Another big time waster is trying to find needed capital. Traditional mortgage lenders want a lot of information about your individual credit history and income before even considering a loan. Then you have to wait weeks for approval, if you even get it. All in all, traditional banks are rarely set up to facilitate a fix and flip transaction.

On the other hand, real estate financing with organizations like Patch of Land who understand your business, can save you the time and frustration of running around in circles trying to find capital. When you develop lender relationships, raising capital (and reducing the time it takes to get it) can be much easier.

There are many ways to increase your number of flips per year, and it all starts with streamlining your processes and working with the right people.

]]>Tue, 10 Apr 2018 15:00:08 +0000https://patchofland.com/blog/all-projects/2018/04/10/5-ways-to-increase-the-number-of-flips-you-do-each-year/
https://patchofland.com/blog/all-projects/2018/04/10/5-ways-to-increase-the-number-of-flips-you-do-each-year/marketing@patchofland.com (Marketing)Marketing14 Under the Radar Cities Where it Makes Sense to FlipAs a result of the housing collapse, some people have been reticent to buy a house, let alone flip one. But now, the housing market is back and on the upswing.

Over the last few years major cities everywhere have been plundered of their distressed properties. This is forcing flippers to search for properties in places where there’s not a lot of flipping activity, where prices are low, and where housing is needed due to high rent prices. Here are fourteen under the radar cities where it makes sense to flip right now.

7 Cities with Higher Inventory

Realtor.com’s annual survey for 2018 highlights the top 100 cities where there has been significant sales growth, price increases, and higher inventories among other factors. Here are the top 7 under the radar cities included in that list:

According to the February 2018 Housing News Report by ATTOM Data Solutions, there are still some local markets with an average discount of at least 30 percent below market value on bank owned property sales. Here are three of the under the radar opportunities that will certainly be of interest to real estate investors:

The number of flips rose at the end of 2017 to the highest rate since 2007. In their article on the best places to flip houses, WalletHub used 22 different metrics including purchase price, cost of renovation, and quality of life for its list of the best cities for flippers. These under the radar cities obtained the top overall scores:

The cost of renovation and remodeling was also low in most of these cities according to the report.

If you are looking for your next real estate investing opportunity, consider investigating the under the radar opportunities in these markets. Then connect with the team at Patch of Land to learn how we work with real estate entrepreneurs like you.

]]>Wed, 04 Apr 2018 17:07:43 +0000https://patchofland.com/blog/all-projects/2018/04/04/14-under-the-radar-cities-where-it-makes-sense-to-flip/
https://patchofland.com/blog/all-projects/2018/04/04/14-under-the-radar-cities-where-it-makes-sense-to-flip/marketing@patchofland.com (Marketing)MarketingPatch of Land to Attend the California Mortgage ExpoPatch of Land will be attending the California Mortgage Expo on Thursday, May 17 at the Anaheim Majestic Garden Hotel in Anaheim, CA.

Don’t miss out on being part of California’s largest mortgage event for loan origination professionals, bringing together hundreds of mortgage brokers, loan originators and bank and credit union lending officers from throughout the region for an event full of education, networking and fun.

So register today to be part of the Golden State’s largest and most exciting conference and trade show for LO pros. We’re bringing a new level of excitement to this year’s event.

A Great New Home In The Los Angeles Area At The Anaheim Majestic Garden Hotel

A Broad Array Of Event Partners From Throughout The Mortgage Community

Multiple Educational Sessions

Top Speakers

Affordable, Compelling And Surprising

Be Part Of The Buzz!

]]>Sun, 25 Mar 2018 19:02:07 +0000https://patchofland.com/blog/patch-of-land-events/2018/03/25/patch-of-land-to-attend-the-california-mortgage-expo-2/
https://patchofland.com/blog/patch-of-land-events/2018/03/25/patch-of-land-to-attend-the-california-mortgage-expo-2/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongPatch of Land is a Proud Sponsor of IMN's Single Family Rental Investment Forum (East)Patch of Land is proud to be a sponsor of IMN's 6th Annual Single Family Rental Investment Conference (East). The event will be held on May 21-23, 2018 at the Loews Miami Beach Hotel in Miami Beach, FL.

This industry-leading event will once again bring together key market participants including REITs, Funds, Aggregators, Fix and Flippers, Note Buyers, ABS & REIT Investors, and more for 2.5 days of lively discussion, thoughtful debate and countless networking opportunities.

The year’s gathering follows the success of last year’s event, which welcomed over 1,100 participants, and featured an expert speaking faculty comprised of some of the sectors largest companies and funds.

As Single Family Rental investments continue to soar with multi-million securitization deals taking place on a monthly basis, and 1 in 9 homes now being single family rental properties in the United States, there has never been a better time to invest in this growing market.

Join your peers this May in sunny Miami for another world-class meeting, and benefit from timely educational takeaways and extensive networking functions.

Who Should Attend

Accounting

Bankers

Brokers

Econometric Services

Insurance

Law

Lenders

Mom & Pops/Fix & Flippers

Property Analytics

Property Auction

Property Broker

Property Management/Property Management Services

Rating Agencies

Single Family Investors

Single Family Owners/Operators

Service Providers/Vendors

Click here for more details about the event and click here to register. We're looking forward to seeing you in Miami!

]]>Sun, 18 Mar 2018 18:43:10 +0000https://patchofland.com/blog/patch-of-land-events/2018/03/18/patch-of-land-is-a-proud-sponsor-of-imns-single-family-rental-investment-forum-east/
https://patchofland.com/blog/patch-of-land-events/2018/03/18/patch-of-land-is-a-proud-sponsor-of-imns-single-family-rental-investment-forum-east/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongWhat's in Store for Home Prices in 2018?CoreLogic’s new home price index showed that prices rose 7% in November over one year ago. It got us wondering how the housing market will shape up this year with the supply-demand equation still out of balance.

Rising prices are great news for sellers, including real estate investors interested in cashing in on home price appreciation. They are also good news for single-family residential investors with loans on properties as they will have stronger equity positions that frequently provide more favorable refinancing opportunities.

Certainly, rising home prices bring challenges as well. For investors looking to purchase single-family homes for long-term rentals or for fix-and-flip purposes, higher prices are a two-edged sword. While they can anticipate their investment gaining value, investors will also have to search harder to find deals that will be profitable.

That means being smart and well-informed. As always, real estate investors who know their markets well will be better situated for long-term success.

CoreLogic predicts that home prices for 2018 will rise 4.2% from November 2017 to November 2018 so the increases are expected to be slightly more tempered this year, although the hottest markets will almost certainly provide significantly better gains.

Lower-end homes experience largest gains

In its report, CoreLogic divides the nation’s housing stock into four groups where the lowest-priced tier of homes experienced the biggest gains, rising 9.7% year over year. The low- to middle-priced tier rose 8.6% and the middle- to moderate-priced tier was up 7.1%. The highest-priced tier rose 5.7%.

The four price tiers are based on the median sale price: homes priced at 75% or less of the median (low price), homes priced between 75 and 100% of the median (low-to-middle price), homes priced between 100 and 125% of the median (middle-to-moderate price) and homes priced greater than 125% of the median (high price).

The rise in low- and moderate-priced homes means homebuyers could get priced out of certain markets. Limited homes for-sale in these affordable tiers will mean continued higher rates of price growth for starter homes, according to Frank Nothaft, CoreLogic’s chief economist.

We believe this phenomenon, which may price some homebuyers out of the market, will keep the single-family rental market strong for the foreseeable future as saving for a down payment and affording higher monthly mortgage payments challenge low- to moderate-income balance sheets. A projected slight rise in mortgage interest rates this year may also play a role as it will have an effect on affordability.

CoreLogic’s report parses a wide range of data for the real estate investor. Its HPI provides measures for multiple market segments—what it calls tiers—based on property type, price, time between sales, loan type and distressed sales.

The report shows that 37% of the top 100 markets had overvalued housing stock, 36% were undervalued, and 26% were at value. Real estate investors can zero in on national maps to see where what cities are undervalued, at value or overvalued.

Las Vegas; Dallas-Plano-Irving; Portland; Seattle and many Florida cities are among the markets considered overvalued. Several central California cities such as Bakersfield, Visalia-Porterville, and Merced were considered undervalued as were many cities in the Midwest, South and Southeast, including Memphis, St. Louis and Cleveland.

Investors have a lot of information at their fingertips as they implement their 2018 investing goals during what looks to be another robust year for the housing market.

]]>Fri, 26 Jan 2018 01:16:43 +0000https://patchofland.com/blog/all-projects/2018/01/26/whats-in-store-for-home-prices-in-2018/
https://patchofland.com/blog/all-projects/2018/01/26/whats-in-store-for-home-prices-in-2018/rgreenberg@patchofland.com (Robert Greenberg)Robert GreenbergThe Rise of the Mid-Tier InvestorAs the single-family rental market matures, we are seeing some interesting trends. One that we find especially interesting is the growth of the middle tier — real estate investors whose property holdings are larger than the small investors that own one or maybe just a few buy-and-hold investment properties but are still much smaller than institutional investors.

Over the years, the single-family rental market has been dominated by “mom-and-pop” investors who own one or two investment properties and this is still the case today. However, the market began to change in 2012 when institutional investors swept in and bought up single-family foreclosures en masse.

But here’s what’s interesting: The share of investors owning between 6 and 10 rental homes has increased 65% from February to November 2017 while the mom-and-pop investment share shrunk by 15% in the same time period.

Other “middle” investor classes also expanded during the same time period. SFR investors owning 100 or more rental homes saw their market share go up 59% while investors owning 11 to 100 rental homes saw their market share rise 58%, according to statistics provided by ATTOM Data.

There may be a variety of reasons for the rise of the mid-tier investor. Here at Patch of Land, we believe the increased availability and the ease and speed of obtaining financing may be playing a role. Prior to 2012, many buy-hold investors bought one property at a time in cash. The opportunities for financing were limited and typically involved taking out a conventional mortgage whose rates were based on an investor’s personal income and finances.

That began to change five years ago, when a variety of alternative lenders entered the space and began offering loans based on a rental property’s cash-flow not the investor’s personal finances.

Around this same time, the crowdfunding industry began to take off. Among new startups in the crowdfunding space were several focused on the real estate and mortgage industry including Patch of Land. Many of these new lenders have targeted the middle-tier investor. Besides the buy-hold, fix and flip investors have increased their use of financing with nearly 36% of flips now financed, up from about 32% in 2014, according to ATTOM Data.

As these additional financing options mature, the mid-tier investor is also seeing an opportunity to gain market share and expand their holdings by taking advantage of leverage to expand their investment portfolios. These investors are becoming even more savvy as they gain experience.

Investors eye properties in the country’s ‘middle’

Besides the growth in the mid-tier for real estate investors there’s another ‘middle’ that is of interest — investments in the middle of the country. With high prices on both coasts, investors are eyeing the country’s mid-section for future real estate investments as home prices nearly everywhere continue to increase.

ATTOM Data recently did a data analysis to show where investors are earning money on their investments and where they are losing it. It turns out some of the best investments are in the middle of the country. The highest cash-on-cash returns in the entire country were in Tulsa, OK (in the 74126 ZIP code), where investors are earning more than $10,000 in annual net cash flow. Other promising markets include St. Louis (ZIP code 63115) and Chester, Pennsylvania (ZIP code 19103). Detroit, Philadelphia and Camden, N.J., also performed well.

Want to examine other ZIP codes? Check out ATTOM Data’s heat map to see more.

]]>Mon, 18 Dec 2017 17:47:46 +0000https://patchofland.com/blog/all-projects/2017/12/18/the-rise-of-the-mid-tier-investor/
https://patchofland.com/blog/all-projects/2017/12/18/the-rise-of-the-mid-tier-investor/rgreenberg@patchofland.com (Robert Greenberg)Robert GreenbergPatch of Land is a Proud Sponsor of the Innovate Conference 2018Patch of Land is proud to be a sponsor of the 2018 Innovate Conference. The event will be held on February 7-9, 2018 at the Balboa Bay Resort in Newport Beach, CA.

Tired of the same old conference? We are too. We decided that for a conference to be worth your time, we needed to show you the latest trends and insights in the private money lending space that we’re seeing. We need to show you how you can raise and deploy capital more effectively. We need to show you what’s really going on in the owner-occupied space. But more importantly, we needed to provide you more value each and every time. Why Innovate 2018? The bigger question is – why not?

Check out the agenda and click here to register for the conference. We hope to see you there!

]]>Wed, 13 Dec 2017 00:00:31 +0000https://patchofland.com/blog/patch-of-land-events/2017/12/13/patch-of-land-is-a-proud-sponsor-of-the-innovate-conference-2018/
https://patchofland.com/blog/patch-of-land-events/2017/12/13/patch-of-land-is-a-proud-sponsor-of-the-innovate-conference-2018/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongPatch of Land to Attend the Best Ever ConferencePatch of Land is looking forward to attending the Best Ever Conference on February 9-10, 2018 at the Ellie Caulkins Opera House in Denver, CO.

The Best Ever Conference is the ONLY Real Estate Investing Conference whose content and speakers are curated based on the expressed needs of the audience.

Come and learn, network, and connect with the best real estate industry professionals in the world.

]]>Tue, 12 Dec 2017 23:14:09 +0000https://patchofland.com/blog/patch-of-land-events/2017/12/12/patch-of-land-to-attend-the-best-ever-conference/
https://patchofland.com/blog/patch-of-land-events/2017/12/12/patch-of-land-to-attend-the-best-ever-conference/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongPatch of Land to Attend the Texas Mortgage Roundup in San AntonioPatch of Land is excited to attend the Texas Mortgage Roundup in San Antonio on February 13, 2018 at the Marriot Plaza SA.

Join your community of mortgage professionals at the Lone Star State's largest mortgage event, The Texas Mortgage Roundup. Don’t miss out on their lineup of engaging events centered around networking, skill-building, and having a great time with your peers.

Register today to be part of Texas’ largest and most exciting conference and trade show for the community of mortgage and real estate professionals.

Check out the agenda and register for the conference here. We hope to see you in San Antonio!

]]>Sun, 10 Dec 2017 20:51:33 +0000https://patchofland.com/blog/patch-of-land-events/2017/12/10/patch-of-land-to-attend-the-texas-mortgage-roundup-in-san-antonio/
https://patchofland.com/blog/patch-of-land-events/2017/12/10/patch-of-land-to-attend-the-texas-mortgage-roundup-in-san-antonio/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongPatch of Land to Attend the SFR ExpoPatch of Land is a proud sponsor of the SFR Expo! The event will be held on February 17-18, 2018 at the Irving Convention Center in Irving, TX.

WHAT IS THE SFR EXPO?

A Two Day Focus on Building Wealth Through Income Properties

The Single Family Rental (SFR) industry is one that is as old as the United States of America. Since the birth of our nation, landlords have owned property and derived income from it’s occupants. After the Great Recession, large private equity giants began acquiring tens of thousands of homes from coast to coast. This “institutionalization” of the industry brought new terms (SFR use to mean Singe Family Residence), new capital, and new understanding to what was the most fragmented industry in existence. While the large investors are impressive, the smaller landlords still hold the key to sustaining property values, and creating generational wealth. Landlords with less than fifty homes still comprise over 90% of the entire industry. This two day event is designed to introduce landlords of all sizes (with a focus on those that own less than 50 houses) to new information, resources, and their peers. Two days of networking, training, and education designed to propel you in an upward direction.

Learn more about the event here and click here to register. We hope to see you all in February!

]]>Sat, 09 Dec 2017 22:00:11 +0000https://patchofland.com/blog/patch-of-land-events/2017/12/09/patch-of-land-to-attend-the-sfr-expo/
https://patchofland.com/blog/patch-of-land-events/2017/12/09/patch-of-land-to-attend-the-sfr-expo/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongRecapping Some of the 2017 Real Estate News that is Impacting InvestorsIt seems like at the end of every year we tend to wrap it up with reviews and lists to summarize the year’s activity. So we thought it would be fun to summarize three big stories in real estate so far this year. Sit back, relax, grab a cup of coffee, and find out what you might have missed.

Investors Enjoy a Resurging Market

House flipping declined significantly after the financial crisis of 2007-2008. But thanks to low interest rates and increasing home prices in the current market, there is a resurgence in home flipping. The renewed interest is being driven by investors hoping for a high return. Last year, 5.7 percent of nationwide home sales were flips, and represented the highest amount since 2006 according to ATTOM Data Solutions.

New Home Sales Grew by 18.9 Percent in September

Sales of new single-family homes in the U.S unexpectedly grew in September, hitting their highest level in about 10 years. This brings the hope that the housing market is regaining speed again after stalling in recent months.

The Commerce Department announced “that new home sales surged 18.9 percent to a seasonally adjusted annual rate of 667,000 units last month amid an increase in all four regions. That was the highest level since October 2007 and followed August's upwardly revised sales pace of 561,000 units.”

More People Think Renting is Better Than Buying

A growing percentage of today’s renters believe that it’s cheaper to rent a house than to buy one. This explains why the homeownership rate in the U.S remains stubbornly low nearly a decade after the housing collapse. A boom in new apartment construction in the past several years has caused rent increases to begin to slow down in many U.S. cities, while increases in home prices have accelerated over the past year. Now, according to Freddie Mac, roughly 76% of renters surveyed in August said they think renting is more affordable than owning a home, up from 65% in September 2016.

This may encourage investors to hang onto the properties they are renovating and consider keeping them as rental properties.

There never seems to be a dull moment in the real estate investing market, and this year has been no exception. With surging home prices, attractive rental rates, and low interest rates, it’s sometimes hard to keep up with all the changes. Patch of Land is here to help keep you informed about all the latest news and trends. We a looking to a strong year end and ringing in 2018 with continued optimism.

]]>Tue, 14 Nov 2017 16:00:01 +0000https://patchofland.com/blog/all-projects/2017/11/14/recapping-some-of-the-2017-real-estate-news-that-is-impacting-investors/
https://patchofland.com/blog/all-projects/2017/11/14/recapping-some-of-the-2017-real-estate-news-that-is-impacting-investors/marketing@patchofland.com (Marketing)MarketingWhy is “Big D” a Mecca for Real Estate Investors?Dallas’ red hot housing market presents exciting opportunities for real estate investors. The top ranked business climate in Texas ensures a steady flow of jobs and a robust housing pipeline that will provide investment opportunities for years to come.

Texas is famous for being extremely friendly to business. As reported by the trade journal Business Facilities, the state received top rankings in 2017 for the Best Business climate and achieved top 10 rankings in 17 categories. With 10,000 corporate headquarters and a diverse economy, Dallas has a business climate that is attractive to investors.

The housing market in Dallas is hot, with the robust housing pipeline barely managing to keep up with the influx of workers needed to satisfy the growing employment environment. As reported in Multi-Family Executive, the Dallas-Fort Worth area saw a 95% increase in new construction starts in the first months of 2017. Of the almost 50,000 new apartments in the pipeline, about 30,000 are expected to hit the market in 2017.

In August 2017, the North Texas region including Dallas set a record with 11,253 single family home sales, an increase of 9%. The median sales price was $250,000, also up 9% with the average sale taking 39 days. The good times are predicted to continue, as Forbes predicts prices will go up 31% by the year 2020. CultureMap Dallas shared that based on HomeUnion’s 2017 National Single-Family Rental Research (SFR) Report, Dallas is one of the best real estate investment markets for 2017.

Dallas was categorized as a new “world city,” in commercial property firm JLL's 2016 investment market survey. This is attracting foreign real estate investors who have added to the strength of the housing market in Texas. In the four quarters ending in the first quarter of 2017, international investors bought 34,135 homes in Texas according to the Texas Association of Realtors, a 59% increase over the previous year. This added $18.7 billion to the housing market with buyers from Mexico and China leading the way.

In addition, Dallas is a city with a strong commitment to the arts and education. At 69 acres, the Dallas Arts District is the largest urban arts district in the country. They really do everything bigger in Texas! Attractions such as the Dallas Museum of Art and the Dallas Symphony Orchestra draw crowds to the area. As home to the U.S. News’ number one ranked School for the Gifted and Talented as well as major universities such as Southern Methodist University, the University of Texas – Dallas and neighboring Texas Christian University, education is clearly a priority for this community.

Mortgage interest rates are on the rise. This is presenting a new set of challenges for mortgage originators and home-buyers who have become accustomed to historically low rates.

Although rising rates might slow home sales, a growing economy and a healthy housing market should provide some relief. Experts predict mortgage rates will inch upward to about 4.5 percent or possibly near 5 percent by year’s end.

This rising-rate environment is expected to have a negative impact on refinance volume. But mortgage originators who prepare now for the changes will be able to provide their customers with great opportunities to fund residential property purchases.

Strong signals

The Federal Reserve, as expected, bumped rates in December of last year and again this past March and June. The Fed’s policy making body, the Federal Open Market Committee, was scheduled to meet again in July, after the deadline for this article. Analysts expect the Fed to raise rates once more this year.

When the benchmark interest rate is raised, it generally is a signal that mortgage rates also are headed upward. Rising mortgage rates can spur homebuyers to act in an effort to lock in rates before they rise any further, but constrained inventory and rising home prices could dampen this incentive to act.

Housing prices posted strong gains this past March, rising 7.1 percent year over year, according to the most recent data available from CoreLogic. This included double-digit growth in Washington state (12.8 percent) and strong growth in Utah (9.9 percent) and Oregon (9.4 percent). Prices in 27 states as of this past March had surpassed peaks reached prior to the housing crisis, and 10 states were within 5 percent of their pre-crisis peaks. CoreLogic predicts that home prices will rise another 4.9 percent over the 12 months ending in March 2018.

Although rising mortgage rates are a concern, low unemployment, improved wage growth and generally strong consumer confidence are working in the mortgage industry’s favor. Unemployment this past May dropped to 4.3 percent, the lowest level in a decade and a mark that most economists consider to be near full employment. Low unemployment fuels wage growth as employers raise pay to attract workers, a positive indicator for housing demand and affordability. The potential for tax reform and reduced regulation also bodes well for small businesses, which employ the majority of Americans.

Loan-product offerings

Although there are challenges ahead, the housing industry’s big picture still looks bright in the year ahead. For the greatest advantage in that market, however, loan originators should be well-versed in the many new mortgage products available today that could benefit a wide variety of borrowers, even in a rising-rate environment.

Following are a few products originators should be aware of:

Low-down payment mortgages: Mortgages with loan-to-value ratios as high as 97 percent made a comeback about three years ago. Originators should learn what’s available because there are differences in qualifications and pricing among products.

Government-backed loans: U.S. government-guaranteed loans are viable options for low-to moderate-income home-buyers who meet the qualifications. Originators need to know these programs inside and out and be able to tout their benefits — such as zero down payment requirements for U.S. Department of Agriculture and U.S. Department of Veteran Affairs loans — as well as the negatives, such as the mortgage insurance requirement for the life of a Federal Housing Administration loan.

ARMs: Adjustable-rate mortgages, which feature lower rates on the front end of the loan, likely will gain in popularity as interest rates rise. Originators should be prepared to offer this option to clients and to explain how ARMs work. Potential customers include those who expect to sell their homes before the higher ARM rate kicks in and buyers who want to invest their house-payment savings elsewhere during the lower-rate period of the ARM. These have been underutilized since the housing crash, partly because of low rates. If rates do rise, originators should be ready with several ARM options.

Unconventional products: Lenders are offering a variety of products apart from 15-year and 30-year fixed-rate mortgages and conventional ARMs. A loan from a crowdfunded real estate lending website could be a viable option for a borrower wanting to invest in residential properties, for example. This type of asset-based loan was virtually unavailable just five years ago. Other unconventional products on the market today include interest-only loans, stated-income loans and 1 percent down payments. These products may fit the needs of a real estate investor or home flipper.

Down payment-assistance programs: Mortgage originators should know how to find down payment-assistance programs in their area and help borrowers determine whether they qualify. They also should learn about flexibilities that allow borrowers to gather resources for their down-payments from a variety of sources, including family, employers and secondary financing.

Condo-lending flexibilities: Condo loans are now more accessible than in the past because of requirement changes made a couple of years ago by Freddie Mac and Fannie Mae Originators who serve metro areas where condos are common should make sure they are well versed in these loans and their requirements. Down payment requirements also have declined, making these loans more available to a wider group of borrowers.

Investor loans: Interest in single-family rental investing has blossomed over the past few years as investors saw opportunities to diversify their financial holdings through portfolios of non owner-occupied properties. That trend is being bolstered by strong demand for single-family rentals. Partnering with the right lender can help mortgage originators gain expertise in investment-property financing, a skill set that can definitely set them apart in the market.

Startup help

Finally, there could be options for originators who left independent shops for the big retail banks to once again become independent operators. NAMB, The Association of Mortgage Professionals’ KickStart program aims to help originators take control of their own destinies in the mortgage industry.

Launched this past September, KickStart has provided 47 grants at$10,000 each (as of this past July). The program’s goal is to grow the mortgage originator channel by providing interested and qualified loan originators with a startup grant to open their own shops.

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Housing and mortgage lending, now 10 years out from the crisis, has a lot going for it. Rising rates and a projected decline in refinance volume, although concerning, come amid the backdrop of a growing economy, housing-price growth, rising wages and widespread economic optimism.

Rising mortgage rates should provide originators with an incentive to step up their game by increasing their industry and product knowledge. This will ultimately help them increase their business while simultaneously providing a better customer experience.

ABOUT THE AUTHOR

Ben Shaevitz is senior vice president of loan origination at Patch of Land and is responsible for leading the company’s loan-production activities and supply-side partnerships. Shaevitz has more than 13 years of experience managing sales and customer acquisition in rapidly growing real estate lending organizations, both startups and traditional banks. Prior to Patch of Land, he led and managed a mortgage sales team at PennyMac Loan Services as the company scaled up to become the eighth-largest loan servicer in the U.S. Reach him at (424) 903-1436 or ben@patchofland.com.

]]>Wed, 01 Nov 2017 14:00:35 +0000https://patchofland.com/blog/all-projects/2017/11/01/tune-up-your-product-knowledge/
https://patchofland.com/blog/all-projects/2017/11/01/tune-up-your-product-knowledge/ben@patchofland.com (Ben Shaevitz)Ben ShaevitzThe Lightning Capital of the Country is Heating Up for Real Estate InvestorsSome say that Tampa, Florida is the lightning capital of the nation. But, lightning doesn’t have to strike twice for investments to pay off in this economy. An affordable housing market, access to beautiful beaches, and a low unemployment rate make Tampa a place to keep on your investment radar.

The housing market in the Tampa-Saint Petersburg continues to strengthen. Standard and Poor’s Core Logic Case Shiller Index reported that prices rose 6.9% in the Tampa metro area in the past year, ahead of the national average of 5.7%. Despite that increase, the median home currently listed has a price of $279,000. What’s more, in January, Tampa entered the Realtor.com list of the top twenty housing markets in the country, landing in 18th place.

In a new report by Zillow, the Tampa Bay area was recently declared as the second best market for first time home buyers, only trailing its intrastate rival, Orlando. In a time when first time home buyers, especially millennials, are shut out of the market in many regions, the affordable homes available in Tampa and surrounding cities present opportunities to jump into home ownership. Of course, this makes the market attractive to investors as well.

Zillow also found that Tampa offers one of the shortest break-even periods, the point where owning a home is cheaper than renting. This comes after only 22 months in Tampa, compared to up to 60 months in San Francisco. As more younger buyers take the plunge, it will continue to invigorate the housing market.

Tampa’s job market is strengthening along with the rest of the country. As the traditional tech hubs such as the San Francisco Bay Area, New York, and Los Angeles become ever more expensive, many tech jobs are migrating to lower cost areas, including Tampa. In a recent report, job recruiting website Ziprecruiter.com ranked the Tampa Bay area as having the 17th highest tech job growth in the country. This speaks to the opportunity for investors to enter the market and help meet the housing demand.

Tampa has many other qualities that make it a great place to live, starting with the low cost of living. The affordable housing and the lack of state income, inheritance, and estate taxes make your paycheck stretch that much farther. The area offers a relaxed lifestyle, along with entertainment, fine dining and museums.

There’s plenty for the family as well. Beautiful beaches are a short trip away in St. Petersburg and Clearwater. Busch Gardens will entertain the family thrill seekers. There are three major sports teams, the Major League Baseball Rays, the NHL Lightning, and the NFL Buccaneers. There are quality schools both in the city and the suburbs, and highly ranked colleges such as the University of South Florida, the University of Tampa, and Eckerd College.

If you are considering investing in Florida real estate, be sure to check out the Tampa area. Connect with the team at Patch of Land to learn how we work with real estate entrepreneurs like you.

]]>Tue, 31 Oct 2017 14:00:33 +0000https://patchofland.com/blog/all-projects/2017/10/31/the-lightning-capital-of-the-country-is-heating-up-for-real-estate-investors/
https://patchofland.com/blog/all-projects/2017/10/31/the-lightning-capital-of-the-country-is-heating-up-for-real-estate-investors/marketing@patchofland.com (Marketing)MarketingRapid Growth Makes Miami The Magic CityMiami is known for beautiful beaches, Cuban culture, and an exciting nightlife. The city that was once in the epicenter of the housing bust is now a roaring market that's attracting savvy investors.

The sandy beaches are one of the biggest draws in Miami. The weather is beach-friendly year round. The culture sprung up around beach life and spawned a thriving nightlife. In addition to surf and sand, Miami offers the natural beauty of Everglades National Park and Biscayne National Park.

Miami is famous for its cultural diversity, with more than half of its residents being foreign born. The Cuban culture is ever present and an integral part of Miami. Yearly events including the Art Basel show and the South Beach Food and Wine Festival attract visitors from across the city and around the world.

Miami was hard hit by the housing crash, which impacted both real estate and the economy in general, but it has come roaring back in the years since. Buoyed by Florida’s low tax environment, with no income, inheritance, or estate taxes, Florida is on pace to have a one trillion dollar economy by 2018 according to an economic forecast by the University of Central Florida. That in addition to a low 5% unemployment rate, makes Miami an attractive market for residents and investors alike.

The real estate market has also been strong, fueled by by foreign investment and easy connections to Miami International Airport. Allan Kleer, a Master Broker with ONE Sotheby’s International, says “Asia has recently started providing us with a new and strong source of buyers for luxury condominiums and larger investment properties. They are aggressive in pursuing good locations and opportunities to renovate prominent waterfront sites, such as the former Miami Herald headquarters.”

Miami always has a strong new construction environment and resale market. This is especially true in the luxury condominium and luxury single family home markets. In July 2017, the Miami Association of Realtors reported a jump of 51.1% in sales of existing luxury condominium sales and a 9.6% bump in luxury single family home sales, with a 2.5% increase in total condominium sales.

Prices have gone up 68 months in a row for single family homes and 71 out of 74 months for condos. The median number of days from listing to contract were 41 days for single family houses, a 12.8% decrease from the previous year, and 72 days for condos, down 1.4% from last year. However, distressed property listings were down from last year, with 2.7% of sales being short sales and 8.2% being REO (bank owned properties). The total of 10.9% is down from 14.7% last year and a peak of 70% in 2009, according to the Miami edition of the World Property Journal.

Not only is Miami a wonderful place to work and play, but the market is firmly back in swing. If you’re thinking about investing in Miami real estate, talk to our team at Patch of Land.

Available on most well-known real estate crowdfunding platforms, auto investing allows real estate investors to select parameters to gain regular and immediate access to deals that meet their investment strategy. Technology working in the background does the bulk of the work for the investor, putting their money into deals that meet their pre-selected criteria.

The benefits of automatic investing to the real estate investor are multifold:

It levels the playing field. Auto investing technology brings opportunities to passive investors with full-time careers —doctors, lawyers, teachers, business professionals and others – to invest automatically alongside sophisticated full-time investors such as hedge funds, day traders and financial institutions.

It improves flexibility. With automatic investing, investors don’t need to be at their computers or mobile devices as the emails on the latest deals come across their Inbox. Under the manual method, popular real estate crowdfunding transactions on some platforms are fully funded within minutes or hours, leaving investors who aren’t able to watch for the new opportunities to hit their email inbox at a disadvantage. Until deal volume increases on some of these platforms, many deals will sell out before investors even see them.

It may allow for higher investments. Some auto-investing features, depending on the platform, allow an investor to participate in more projects for the same dollar amount versus the manual investment method.

It increases portfolio diversity. Real estate investors are able to better diversify their portfolios by taking advantage of more investments with a lower minimum investment in each opportunity.

Investors gain access even when demand is high. There are a number of different ways that individual real estate crowdfunding platforms will select deal participation when the demand exceeds supply. Patch of Land, as an example, uses a pro-rata formula to guarantee that investors get into all high-demand deals that match their criteria, although they may not get in for the full dollar amount they seek. Investors who invest more per month with certain platforms might get a higher pro-rata share in such instances.

What’s Included in Auto Investing

While each real estate crowdfunding platform’s auto investing feature is somewhat unique to their site, all have some general features that investors are likely to find:

An account dashboard that explains how to set up an account and provides data on an individuals’ past transactions.

An investor-controlled decision on the total amount of funds invested per month. Once an investor’s monthly limit is reached, auto invest programs stop placing orders.

An investor-controlled determination of how much money to put into each transaction, up to the monthly total investment commitment.

Greater flexibility on minimum investment amounts. Some platforms allow an investor to invest less money into each deal if they are using the automatic feature.

The ability to set multiple parameters to uniquely define which deals an investor wants to invest in. These parameters may include annual percentage rate (APR), loan-to-value (LTV), the investment type (e.g., residential, commercial, multifamily, purchase loans, refinance loans, rehab loans), the term of the loan, and after-repair value (ARV) of rehab loans.

A cancellation policy with a timeframe for investors to get out of a particular auto-invested deal. There may be monetary penalties attached, depending on the platform or the number of times an investor seeks to cancel an auto-invest transaction.

Real-time data. Some platforms may provide high-level data that shows an investor how many investments are available based on the investment criteria selected. This allows an investor to see what investments are available based on their pre-selected criteria on each platform and make comparisons to see which sites offer the most opportunities for the types of deals they seek.

Robust underwriting data. Technology-driven real estate crowdfunding sites have a host of data at their disposal which allows them to vet deals before offering them to the crowd. This provides piece-of-mind to investors because risks have been quantified and only deals that meet the platform’s standards are being offered.

How auto investing helps lenders

While the multiple benefits of automatic investing are fairly obvious to investors, real estate crowdfunding lenders stand to benefit as well. Using data gathered from investor parameters selected in a respective platform’s auto invest feature, the lender is able to see if a loan will fully fund or by what percentage it will fund before the loan documents are ever signed or approved.

This data helps determine whether an appetite exists on a particular real estate crowdfunding platform for a specific loan. If the crowd has no appetite for the loan, then it won’t be made. If there’s a huge appetite for a particular loan type, then more of those types of loans may be offered.

Lenders who have built-out this type of auto-investing technology in an intelligent way will have an audit history to see how investing parameters have changed over time, which will help to make smarter lending decisions now and into the future.

Lenders, armed with auto-investing data, will be able to draw trend lines on how investors are or are not changing their investing parameters. For example, a lender could look at whether investors are opening up their credit box to higher LTV loans this fall compared to what they were doing a year ago. Is the appetite for riskier loans on the rise or on the decline? In another example, the data might show that investors are funding commercial deals at a higher percentage than residential loans as compared to their past investing behavior, or they may have stopped funding rehab loans altogether.

With the range of parameters available for study, lenders with robust technology have a wealth of data at their fingertips that can be used to make future lending decisions. This could mean making a decision to deny a loan application because “crowd” investors have no appetite to fund it while prioritizing another loan through the approval and funding process because of high demand from investors.

In a win-win for investors and for lenders, auto invest technology allows lenders of real estate crowdfunding sites to be proactive in offering products (loans and real estate deals) that its investors want to invest in while avoiding deals investors have no desire to fund.

Differences among platforms

It should be noted not all real estate crowdfunding platforms operate under the same securities rules. Some may only accept accredited investors under the JOBS Act’s Rule 506(c) of Regulation D. A big benefit of Rule 506(c) is that it allows a platform to market its offerings to the investor world via a host of mediums and gain faster funding as a result. The 506(c) rule requires that a platform must verify anyone investing on its platform is an accredited investor.

Other platforms operate under Rule 506(b), which limits the ability to solicit investors, but allows a platform to accept a limited number of unaccredited investors they deem to be sophisticated. A sophisticated person is generally deemed by the Securities and Exchange Commission to be a person of sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment. The 506(b) rule still requires accredited investors to be verified.

To be considered an accredited investor, one must have a net worth of $1 million, either alone or with a spouse, not including the value of the investor’s primary residence. Or the investor must be able to prove they have made $200,000 a year over the past two years (or a $300,000 income when combined with a spouse) with a reasonable expectation of continuing to make that amount in the current year; or they may submit a letter of accreditation by a CPA, attorney or other professional.

As technology continues to allow for automation and artificial intelligence, it’s simply a given that investing will continue to move toward greater automation. We’ll likely continue to see discussions going forward about whether auto-investing is on par with investing done via the guidance of a professional financial planner, and we welcome such discussion.

It’s our belief that automatic investing is making it easier for investors of all types to invest smarter in real estate.

]]>Fri, 20 Oct 2017 16:35:17 +0000https://patchofland.com/blog/all-projects/2017/10/20/real-estate-crowdfunders-turn-to-auto-invest/
https://patchofland.com/blog/all-projects/2017/10/20/real-estate-crowdfunders-turn-to-auto-invest/bfritton@patchofland.com (Brian Fritton)Brian FrittonUnderstanding LTV vs. ARVIn the world of real estate investing, you’ll often see LTV (Loan-to-Value) versus ARV (After Repair Value) as common means for evaluating the risk of a loan as it relates to a residential property. The Loan-to-Value ratio is the amount being borrowed as compared to the value of the property, while the After Repair Value is estimated based on the value of the property after the renovations are completed.

Let’s look at each of these in a bit more detail:

Loan-to-Value Ratio

As mentioned, Loan-to-Value takes the amount borrowed and compares it to the present value of the property, not future improved value. To derive a value for the property, many lenders just do a drive-by assessment, which often inaccurately depicts the value of the asset. At Patch of Land, we review property “comps” to determine the sales price of similar properties in similar condition and located in the same neighborhood as well as have third party inspectors do a walk through appraisal in order to determine the value of a property.

Many lenders have different requirements for the LTV percentage they’ll allow. At Patch of Land, we lend up to 85% of the value of the purchase price or as-is value (the lesser of the two) for well qualified borrowers.

As an example of Loan-to-Value, if an investor borrows $80,000 of the total $100,000 purchase price of his home, the loan-to-value ratio is 80 percent.

After Repair Value

After Repair Value is an estimated value of a property after renovations. Researching the property, including the location, lot, building, comps and the estimated value of repaired properties in the neighborhood over the last six months, determines the ARV. You also need to take into consideration additional expenses that may occur in the way of holding costs or points. Lenders often have different requirements for the amount they will lend based on the ARV. At Patch of Land, we typically lend 70% of the ARV with a minimum down payment of 15-25% depending on the borrower and the location of the asset.

As an example of After Repair Value, let’s say Sarah wants to borrow money for a fix and flip rehab project. We determine the property in question would sell for $400,000 on the market. We will lend up to 70% of that amount, which in this case would be up to $280,000, to purchase the house and do any needed repairs.

PRO TIP: As a borrower applying for a loan to improve a property, you’ll need to have a line item rehab budget and inspections will take place throughout the draw process so that disbursements against the loan can be made.

How should these two ratios factor into an investor’s decision to move forward with a real estate investment?

Which one is better for you really comes down to the numbers. Remember, we typically lend no more than 70% ARV, but can go as high as 85% for LTV. Therefore, it’s normal for an LTV percentage to be greater than an ARV percentage on a loan. You’ll really need to make sure your numbers are on point, that you’re buying right, and that there’s enough room to improve the property so that you can get your money back and make a profit.

Lending with Patch of Land

We can fund your first loan in as little as 7 days — and we can fund on most asset classes from single-family homes to small apartments, mixed use and multi-unit apartments. Connect with us at Patch of Land for more information on how to partner with us on your next project.

]]>Tue, 17 Oct 2017 19:21:57 +0000https://patchofland.com/blog/all-projects/2017/10/17/understanding-ltv-vs-arv/
https://patchofland.com/blog/all-projects/2017/10/17/understanding-ltv-vs-arv/marketing@patchofland.com (Marketing)MarketingWhat Real Estate Investors are Finding “Deep in the Heart of Texas”The motto “Keep Austin Weird” is an illustration of how the capital of Texas revels in its uniqueness relative to the rest of the state, but Austin joins other Texas cities when it comes to opportunities for real estate investors. Long known for its thriving music scene, the flagship campus of the University of Texas, and the “Silicon Hills”, home of many technology companies, Austin is a top destination for investment dollars.

Keep an eye on the job market

The job market in Austin is red hot and getting hotter. With a growing high-tech sector and a robust restaurant scene supplementing the evergreen education and government sectors, the jobless rate dropped to a seasonally adjusted 2.8% in July. The strong job market is drawing job seekers, propelling Austin to the second-highest population growth in the country, whether measuring the city itself or the broader metro area.

The population growth further spurs growing construction and education sectors. According to a report by CBRE, Austin ranks as the eighth best city for tech workers, ranking high in educational attainment, job growth, and millennial population growth.

Population growth is an added benefit

The population growth is spurring a boom in housing construction. According to a report from Trulia, the Austin metro area combined with Houston and Dallas to permit new construction at a rate equalling a total of 130,000 new units in 2017, accounting for one out of ten new units in the entire country.

Austin itself is on a pace to build more than double the historic number of new homes this year, at the top of the 100 largest metro areas. The existing home market also remains strong,withan increase in single family home sales in the Austin-Round Rock metro area of 2,892 homes, a 2.8% increase.

And, it’s just a great place to live

People are flocking to Austin because it is an excellent place to live. In fact, US News and World Report ranked Austin as the best place in the country to live. Austin enjoys the benefit of Texas’s low tax burden, with no personal or corporate state income taxes , boosting the purchasing value of money earned.

In addition, Austin is packed full of entertainment options for day and night. During the day, the presence of the University of Texas provides cultural and educational options, while the multiple lakes near downtown are perfect for outdoor activities. At night, Austin is known as the live music capital of the world, with live music venues up and down Sixth Street. In addition to Texas’s famous barbeque, a hot fine dining scene, and famous institutions such as the Alamo Drafthouse, there are always new entertainment opportunities.

Austin also has many attractions for families. The Austin Independent school district features the Liberal Arts and Science Academy, ranked #27 in the country by US News and World Report. In addition, there are affordable activities for kids including free days at museums, hundreds of parks, and outdoor concerts and festivals. A thriving food truck scene provides an affordable way to feed the family without the kids having to sit still in a restaurant.

A new lower minimum investment amount ($1,000 per opportunity) versus the $5,000 minimum for manual investing, to help facilitate better portfolio diversification

Priority access to opportunities before they are publicly available on Patch of Land’s platform

Our investors are notified by email of the automatic investments that have been made with their funds and have 24 hours to opt out.

Here at Patch of Land, we see several benefits to our new AutoInvest feature and we are excited to be sharing them with our investors. A key benefit is that you will no longer have to sift through lots of different opportunities to find the ones that are most attractive to you.

Nor do you need to be holding your breath, waiting at your computer, or with your tablet or smartphone in-hand for Patch of Land’s weekly email listing of investment opportunities to come across your Inbox. Manual investing can sometimes cause you to miss out on an opportunity if you don’t get to it immediately because some deals take only minutes to fully fund. And who has time to sift through all those emails anyway?

Even if a deal is over-subscribed, AutoInvest participants will still get in on every deal because the technology uses a proprietary allocation algorithm to pro-rate an equitable portion of the opportunity to every investor, so everyone gets their fair share of every investment that meets their pre-selected criteria.

Our co-founder and chief technology officer, Brian Fritton, is particularly excited about the “back-test” feature that the new technology offers. If you want to know “what if,” now you can. The back-test allows you to see what returns your selected investment criteria would have generated over the past year.

For example, if one of our investors wants to go back 12 months and test the potential returns that would have been generated by the loans allocated via their pre-selected investment criteria, he or she can now do that.

There’s no fee for AutoInvest. Our investors simply go to their investor dashboard on Patch of Land’s online platform to enroll. Once there, you’ll be prompted to select investment criteria. That includes setting a monthly funding limit that you don’t want to exceed and deciding the maximum amount of money you want to go into each individual investment.

Platform investors simply use the AutoInvest dashboard to selecttheir minimum annual percentage rate (APR); their preferred loan term (12 months to 2 years); and their preferred project types, such as single-family residential, multifamily or commercial.

Want to learn more? Check out our introductory video and learn how AutoInvest can work for you!

]]>Mon, 09 Oct 2017 21:19:29 +0000https://patchofland.com/blog/all-projects/2017/10/09/new-autoinvest-feature-enhances-patch-of-land-real-estate-investing-platform/
https://patchofland.com/blog/all-projects/2017/10/09/new-autoinvest-feature-enhances-patch-of-land-real-estate-investing-platform/marketing@patchofland.com (Marketing)MarketingPatch of Land is Proud Sponsor of the Think Realty National Conference & Expo in AtlantaPatch of Land will be sponsoring and attending the Think Realty National Conference & Expo in Atlanta. The conference will be held on October 14-15, 2017 at The Westin Buckhead.

Think Realty National Conference & Expo is the place to connect with pros and get info you can use to earn more return on your real estate investments. Take advantage of our high-impact session lineup to position yourself for growth, and learn new tips and tricks to be successful with your investments in our industry.

Pathways to Smart Investing

Just as every local housing market presents multiple routes to ROI, every real estate investor has multiple options for creating personal real estate investing success. Choosing the right route to that success is crucial to optimizing your profits, productivity, and personal satisfaction in your real estate investing career. The Think Realty National Conference & Expo in Atlanta, Georgia will combine the latest training and strategies in real estate with the element universal to every successful real estate investor’s portfolio: networking.

Don’t miss this chance to define and refine your pathway to smart investing with the help of some of the most influential investors from all sectors of our industry October 14-15, 2017 at the Westin Buckhead in Atlanta.

Join us Saturday, October 14 for education and networking with over 15 breakout sessions and a large vendor hall bustling with resources and services. Come back on Sunday, October 15 for intensives.

Register for the conference here and find us at Booth 401. We hope to see you all there!

]]>Mon, 09 Oct 2017 15:00:04 +0000https://patchofland.com/blog/all-projects/2017/10/09/patch-of-land-is-proud-sponsor-of-the-think-realty-national-conference-expo-in-atlanta/
https://patchofland.com/blog/all-projects/2017/10/09/patch-of-land-is-proud-sponsor-of-the-think-realty-national-conference-expo-in-atlanta/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongReal Estate Investing in the Borough of Homes and Churches - BrooklynThey say that if you can make it in New York, you can make it anywhere. For the past decade or so, Brooklyn has been the hottest borough in the city, even surpassing Manhattan, especially for the millennial demographic. With wide-ranging neighborhoods from the ultra-hip DUMBO and Park Slope to up-and-coming Bedford-Stuyvesant and East New York, or the suburban feeling Midwood and Canarsie, there is something for everyone.

Brooklyn maintains a strong real estate market. According to a report by Corcoran, a real estate group, sales closed up 17% year over year in the second quarter of 2017, however, this was mostly due to new construction coming on the market. The median price for Brooklyn soared to $760,000, a jump of 27% from 2016 and a 9% increase from the first quarter. Surprisingly for such a hot market, the average number of days on the market grew 22%, to an average of 79 days.

While prices are expensive throughout much of the borough, there are neighborhoods that score well on the buy versus rent metric, even in a city of renters. “Brooklyn buyers willing to venture farther from Manhattan will find their investment trumps renting quite quickly,” shares Bloomberg.com.

Despite moving up in the food chain, Brooklyn still holds onto its old time charm. The neighborhoods truly are neighborhoods where people develop relationships with one another.. Each neighborhood has its own look and feel.

For instance, Williamsburg is divided between the invading millennials and the longstanding Orthodox Jewish community. Brighton Beach, known as “Little Odessa,” reflects the Russian heritage of those who have settled there. Brooklyn even has one neighborhood, Brooklyn Heights/Cobble Hillthat recently joined the list of the richest ten neighborhoods in New York City. It is the only neighborhood outside of Manhattan to make the list.

Brooklyn provides easy access to the jobs and entertainment of Manhattan without making the same compromises. Unlike Manhattan, you aren’t relegated to a postage stamp apartment in a high rise building. There are opportunities to be had in new condo construction, the classic brownstone, or even in the outer neighborhoods… single family houses with yards. With direct trains to Manhattan from most neighborhoods, a car is not a necessity. However, if you decide to keep a car, parking is at least possible.

Brooklyn is also a great neighborhood for families. A report from StreetEasy.com looked at the percentage of apartments boasting two or more bedrooms, average rents, and school quality to find the most affordable locations for families. Greenwood topped six Brooklyn neighborhoods in the top ten, with relatively affordable homes, good schools, and easy access to Prospect Park.

Next time you are looking for investment opportunities in the Big Apple, don’t neglect Brooklyn! And, to learn more about how we can help you invest in the Borough of Homes and Churches, connect with our team at Patch of Land.

]]>Tue, 03 Oct 2017 17:44:05 +0000https://patchofland.com/blog/all-projects/2017/10/03/real-estate-investing-in-the-borough-of-homes-and-churches-brooklyn/
https://patchofland.com/blog/all-projects/2017/10/03/real-estate-investing-in-the-borough-of-homes-and-churches-brooklyn/marketing@patchofland.com (Marketing)MarketingPatch of Land to Attend FinCon 2017 in DallasPatch of Land is excited to attend #FinCon17 on October 25-28, 2017 at the Sheraton Dallas Hotel!

FinCon: Where Money and Media Meet

On October 25th-28th, 2017 an energetic community of money media nerds will descend on Dallas, TX for a weekend of connecting and learning. Will you be there?

Attendees connect with others in the community, learn to create, promote, and profit from compelling online content, and discover new trends in personal finance and investing.

What You'll Learn:

CREATE

You’ll learn how to craft compelling money-related digital content for your blog, social accounts, podcast, and video channel – part of this process is learning what’s current in personal finance, deals, and investing.

PROMOTE

You’ll learn how to establish your online platform. You’ll also learn to get your quality content in front of more of the right people using the latest in marketing, branding, networking, SEO, and community-building best practices.

PROFIT

You’ll learn from the proven experts exactly how to earn money by freelancing, pairing your content with relevant advertising, leveraging your influence, and creating your own products and services.

AAPL’s 8th Annual Conference is one of the largest events dedicated to private lending, the Conference provides strategic, industry-specific education, distinguished speakers, valuable sessions, unlimited networking engagements, and so much more for professionals across real estate servicing.

At the 2017 American Association of Private Lender’s (AAPL) Annual Conference this November, you’ll discover inspiration through association and build towards a better tomorrow.

Packed full of enlightening sessions with expert speakers and a variety of networking opportunities, AAPL’s 8th Annual Conference is the only place to be if you want to learn new skills and broaden your horizons.

Click here to register and learn more about the conference. We hope to see you there!

]]>Sun, 01 Oct 2017 15:00:40 +0000https://patchofland.com/blog/all-projects/2017/10/01/patch-of-land-to-attend-aapls-annual-conference-in-las-vegas/
https://patchofland.com/blog/all-projects/2017/10/01/patch-of-land-to-attend-aapls-annual-conference-in-las-vegas/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongPatch of Land is a Proud Sponsor of IMN's Single Family Rental Investment ForumIMN's established Single Family Rental Investment Conference (West) returns for its 6th edition on December 4-6, 2017 at the Phoenician Resort in Scottsdale, AZ. This industry-leading event will once again bring together key market participants including REITs, Funds, Aggregators, Fix and Flippers, Note Buyers, ABS & REIT Investors, and more for 2.5 days of lively discussion, thoughtful debate and countless networking opportunities.

The year’s gathering follows the success of last year’s event, which welcomed over 1,100 participants, and featured an expert speaking faculty comprised of some of the sectors largest companies and funds, including Zack Johnson, American Homes 4 Rent; Justin Iannacone, Colony Starwood Homes.; John Bartling, Invitation Homes; Griffin Wetmore, Silver Bay Realty Trust Corp; Michael Cook, Street Lane Homes.

As Single Family Rental investments continue to soar with multi-million securitization deals taking place on a monthly basis, and 1 in 9 homes now being single family rental properties in the United States, there has never been a better time to invest in this growing market. Join your peers this December in Scottsdale for another world-class meeting, and benefit from timely educational takeaways and extensive networking functions.

]]>Sat, 30 Sep 2017 15:00:35 +0000https://patchofland.com/blog/all-projects/2017/09/30/patch-of-land-is-a-proud-sponsor-of-imns-single-family-rental-investment-forum/
https://patchofland.com/blog/all-projects/2017/09/30/patch-of-land-is-a-proud-sponsor-of-imns-single-family-rental-investment-forum/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongWhat is Attracting Investors to the Los Angeles Market?The City of Angels has long been known for its near perfect weather, beautiful beaches and the entertainment industry – but these days, property investment represents another draw for this California metropolitan area. Let’s look at a few points that underpin this emerging development, and identify some of the main draws for investors in Los Angeles.

Pulling Record Profits

Record flipping profits were seen in Los Angeles last year. In fact, the Orange County Registerfinds profits averaged nearly $127,000 per flipped home in Los Angeles County. This figure is the highest in the region. Add in a median per-flip purchase price of $362,121 and a median sales price of $489,000, and it’s clear that flippers and investors are finding a good profit here.

Moreover, flipped homes are making up a decent percentage – 7.6 percent, to be specific – of all home sales in the area. That translates to 5,470 Los Angeles homes that were sold during 2016.

Gentrification Makes Neighborhoods Hot, Hot, Hot

Local areas including Glassell Park and Eagle Rock are seeing homes listing north of $800,000 – but this should not necessarily deter investors or flippers from considering Los Angeles as a whole. In fact, the advent of gentrification can make a great deal for a property investor – so long as one gets in at the right time.

Millennial Dreams Fuel Investment Means

The Los Angeles Times tells us that hipsters are becoming flipsters, drawn to the city by a desire to cut down on commutes by buying older and more affordable homes in what the newspaper calls “highly urban areas”.

Quoting UCLA Ziman Center for Real Estate professor Paul Habibi, the newspaper makes the case that flipsters are suited to selling homes to fellow hipsters: “In my classes, I always talk about ‘eating your own cooking,’” Habibi said. “It’s easier to design something that’s palatable to both you and the end user. Hipsters know what other hipsters like best.”

Impressive Economic Indicators

In June, the Los Angeles County Economic Development Corporation released its 2017 “People, Industries, Jobs Report”, which identifies a falling 2016 unemployment rate both in Los Angeles city and county along with construction as a major industry to target in the coming years. “As the housing market recovers, construction industries are expected to make a robust recovery,” the analysts write. “Housing starts are showing life after a dismal few years, and will be needed to meet pent-up demand.”

Herein lies an investor’s dream: a phoenix rising from the ashes, ready to find a new population for freshly rehabilitated property. In other words: ready, set, go.

Ready to Invest in Los Angeles?

Learn more about your funding options at Patch of Land. We’re always just a phone call away and look forward to learning more about your projects.

The technology allows AutoInvest participants to immediately reserve positions and secure placement in highly-desired investment opportunities. Once participation is secured based on their pre-selected investment criteria, investors are notified via email and have 24 hours to opt out of the investment.

“AutoInvest participants will no longer need to spend time sifting through dozens of real estate investment opportunities to find the ones that best fit their investment strategy. Investors can now leverage AutoInvest to automatically participate in the loans that match their personal investment criteria,” said Paul Deitch, Patch of Land’s Chief Executive Officer. “This feature is another way Patch of Land is helping investors build a diversified portfolio of loans on assets backed by first-lien mortgages.”

Sharing insight on the technology, Patch of Land co-founder and Chief Technology Officer Brian Fritton explained, “Using an investor's pre-selected investment criteria, our system is able to immediately match and reserve a position in investment opportunities on our platform. When an opportunity is over-subscribed, the technology ensures all appropriate participants are enrolled by using a proprietary allocation algorithm to prorate an equitable portion of the opportunity to their portfolios.

Fritton added, “AutoInvest also enables participants to conduct a 12-month back test of the potential returns that could have been generated by the loans allocated according to the selected investment criteria. This analysis helps illustrate how well the selected investment criteria matches the participant’s personal investment objectives based on the opportunities from the previous year.”

To use AutoInvest, platform participants simply enable the AutoInvest feature from their Investor Dashboard on the online portal. They are then prompted to select their investing criteria, which includes their desired monthly investment limit; designate a maximum investment amount for each opportunity; choose their minimum annual percentage rate (APR); select the preferred loan term, from 12 months to two years; and pick the project type with which they are most comfortable. With that input, the platform’s technology curates matching investments and automatically includes the participant in deals at the desired level.

Since issuing its first real estate loan in October 2013, Patch of Land has been recognized in the financial technology space as a leader in online real estate lending. The company employs proprietary technology to efficiently fill a void in the real estate finance industry by providing borrowers reliable access to capital for residential and commercial real estate projects. The platform also establishes a marketplace through which qualified individual and institutional investors can participate in private real estate projects with low minimum investments, predictable returns, and first-lien secured loans.

]]>Mon, 25 Sep 2017 20:27:31 +0000https://patchofland.com/blog/all-projects/2017/09/25/patch-of-land-enhances-crowdfunding-platform-with-new-autoinvest-functionality/
https://patchofland.com/blog/all-projects/2017/09/25/patch-of-land-enhances-crowdfunding-platform-with-new-autoinvest-functionality/exec@patchofland.com (The Executive Branch)The Executive Branch Is it Market Growth or Southern Charm That Attracts Atlanta Real Estate Investors?Atlanta is a city full of history and Southern Charm. Add to that incredible diversity, good weather, and a booming economy, and the city that gave us Coca-Cola is a great target for real estate investors.

The Market is Hot

The Atlanta Journal Constitution reports that the median home price increased by 7% in the first half of 2017 to $240,695. The number of sales went up 4%, to 32,737 homes sold. The average house was on the market for 52 days, but in Cobb and Gwinnett counties, houses were snapped up in an average of only 33 days. According to a study published by USA Today, Atlanta suburb Snellville in Gwinnett County has the ZIP code with the 10th highest projected appreciation for the next five years.

Major Companies Provide Top Employment

Atlanta has a thriving economic climate and is the headquarters of many Fortune 500 companies. Most famous is Coca-Cola, long a central pillar of the Georgia city’s economy. The home of CNN, Delta Airlines, UPS and AT&T Mobility, Atlanta provides a diversified economy and a strong market that is more resistant to downturns.

SunTrust Park Provides Opportunity

The opening of the Atlanta Braves’ new home in nearby Smyrna (Cobb County) has created investment opportunities nearby. The ballpark opened in time for the 2017 season, with the Braves playing 81 home games per year. In addition to the new park, developers are planning new restaurants, a live music venue, a luxury hotel and upscale residences.

Sean Black, the CEO of Knock, an online home sales startup reported, "Developers continue to build in the area, and people continue to buy. Approximately 13% of nearby homes that sold within the last 180 days were newly constructed - and those new homes went for a median price of $450,000. People are seeing the value in the area, and they’re investing in it."

Growing City and Growing Economy

Atlanta is adding new residents and jobs at levels not seen since before the Great Recession. According to data released by the Atlanta Regional Commission, the Atlanta metro area added 78,300 people from 2016 to 2017, for a population of 4.9 million people. Included in that is an addition of 9,900 in the city of Atlanta.

Mike Carnathan, manager of ARC’s Research & Analytics Group, shared in the Atlanta Business Chronicle that the region “was slow to emerge from the recession, but strong growth in the past few years shows that our recovery has taken hold.” The strongest growth was seen in the northern suburbs, led by Cherokee County. This growth has been fueled by an influx of multi-family housing and a hot job market.

In the past year, the Atlanta metro area ranked second to Dallas/Fort Worth in the number of new jobs, at 87,000. According to the U.S. Conference of Mayors, the Atlanta metro area is projected to grow to nearly nine million people, which would make it the sixth largest metro area in the country. That would be a 48.7% increase in population. Clearly there is an ongoing need for housing to accommodate this kind of growth.

Investing in Atlanta

If you’re a real estate investor who is thinking about investing in the Atlanta real estate market, consider your funding options at Patch of Land. We’d love to speak with you about your project! Connect with us today.

]]>Tue, 19 Sep 2017 17:02:20 +0000https://patchofland.com/blog/all-projects/2017/09/19/is-it-market-growth-or-southern-charm-that-attracts-atlanta-real-estate-investors/
https://patchofland.com/blog/all-projects/2017/09/19/is-it-market-growth-or-southern-charm-that-attracts-atlanta-real-estate-investors/marketing@patchofland.com (Marketing)Marketing5 Reasons Why Denver is Attracting Real Estate InvestorsWhat attracts people to Denver, Colorado? Surrounded by picturesque mountains, the Mile High City offers outdoor activities year round, from hiking and mountain biking in the summer to downhill and cross-country skiing and snowboarding during the winter. Coupled with a thriving job market, Colorado is a prime target for real estate investment dollars.

Here are just a few reasons why the Mile High City is attracting attention:

#1. Denver has one of the hottest job markets in the nation.

Nerdwallet ranked Denver the second best market for job seekers in 2017, offering an unemployment rate of less than 3% and strong earnings. With Denver’s robust aerospace industry, the nearby University of Colorado at Boulder, a variety of healthcare systems, national and state government offices, and CenturyLink, Denver is set to be a hot market for job opportunities this year.

#2. Increasing rents and strong job growth fuel housing demand.

The need for quality housing is strong in Denver, with 2.9 jobs for every new housing unit permitted between 2010 and 2015, according to Apartment List. The market stability is also backed by a 52% increase in average rent during the same time in a city where half of the population rents. This offers investors a large pool of renters in a solid job market who will be motivated to enter the housing market and escape the world of rising rents.

#3. Flippers see the potential.

According to ATTOM Data Solutions, Colorado Springs, Colorado and Denver have the highest number of flips originally purchased with financing, at 69.3% and 54.8% respectively. Financing provides a way to invest in a city with rising costs while taking advantage of interest rates that are still at historic lows.

#4. Denver’s quality of life keeps attracting new residents.

Denver’s many natural attractions and strong infrastructure make it an evergreen city for the real estate market. With a large system of parks, a strong school system and a thriving downtown core, Denver’s quality of life will continue to attract new residents. The city of Denver is also surrounded by unique suburbs, from Littleton, which is the home to high-tech companies, to Boulder and Colorado Springs, home of universities, medical centers, and the Air Force Academy.

The variety of industries along with state and national government headquarters, offer a framework to protect the Denver area from sudden downturns. Other attractions, such as the majesty of the Rocky Mountains overlooking the city and year round outdoor activities, ensure there will always be a draw to the city.

#5. Quality schools also attract families to the area.

Denver and Boulder are well known for high quality schools and a family friendly atmosphere. Niche.com ranked Denver suburbs including Superior, Louisville, and Holly Hills as among the best places to raise a family. With very safe neighborhoods and a thriving nightlife scene, Denver is an attractive area for people of all ages.

The strong job market, good schools, and the thriving entertainment scene, make Denver an attractive market for real estate investment.

Making an investment in Denver

If you’re a real estate investor who is thinking about investing in the Denver real estate market, consider your funding options at Patch of Land. We’d love to speak with you about your project! Connect with us today.

]]>Tue, 12 Sep 2017 15:00:26 +0000https://patchofland.com/blog/all-projects/2017/09/12/5-reasons-why-denver-is-attracting-real-estate-investors/
https://patchofland.com/blog/all-projects/2017/09/12/5-reasons-why-denver-is-attracting-real-estate-investors/marketing@patchofland.com (Marketing)Marketing4 Reasons Why Real Estate Investors are Interested in the City by the BaySan Francisco can be a challenging real estate market with tight inventory and high prices. However, with an estimated 64,000 new housing units in the pipeline per estimates from the San Francisco Business Times’ analysis of the Pipeline Report, the opportunities available can be very lucrative for a real estate investor. Here are some reasons why San Francisco is an attractive destination for investment dollars:

#1. San Francisco is the tech hub of the world.

The supercharged job market and tight housing supply ensure a strong market in the Golden City. Some of the most successful tech companies are based in San Francisco, including Twitter, Yelp and AirBNB. Additionally, companies in nearby Silicon Valley including Google and Facebook sponsor private luxury buses to shuttle employees to their suburban campus. A shuttle stop located near your property can actually increase the value.

According to a study by the rental site ApartmentList, between 2010 and 2015, the San Francisco-Oakland-Hayward census area created only one new housing unit for every 6.8 new jobs. In the city of San Francisco, there was only one new home for every 8.2 jobs. A steady stream of new jobs means that there are always people hunting for new homes. And with the opportunity to supply housing in a market with such pent up demand, real estate investors would benefit from investing in San Francisco.

#2. San Francisco is one of the best places in the country to live.

A new report from Niche.com ranked four San Francisco neighborhoods as some of the top 25 neighborhoods in the country: Rincon Hill, Monterey Heights, Presidio, and Central Waterfront/Dogpatch. One of the attractions is the incredible diversity, with the Bayview neighborhood ranking among the most diverse. In addition, nearby cities Berkeley and Sunnyvale rank amongst the best cities to live.

#3. The tight market leads to bidding wars and quick sales.

According to the San Jose Mercury News, 62% of sales are for more than the asking price. This is second highest in the nation, behind the nearby city of San Jose at 63%. San Francisco also had the fifth fastest average sale, with the typical home selling in 28 days. According to Nela Richardson, Redfin's chief economist, “Rising prices and increased equity may tip the scales for homeowners who have been delaying their decision to move up, which could add much-needed starter-home inventory to the market.” The increase in starter-home inventory could provide buying opportunities for flippers.

According to Forbes, “The current wave of investments is likely only the tip of the iceberg. Only 1% of Chinese insurer assets are invested overseas and of that, only a fraction is invested in U.S. real estate. China’s insurance industry is valued at approximately $1.83 trillion, according to figures from the Chinese Insurance Regulatory Commission.”

Jumping into the San Francisco Market

If you’re a real estate investor who is thinking about jumping into the San Francisco real estate market, consider your funding options at Patch of Land. We’d love to speak with you about your project! Connect with us today.

]]>Tue, 05 Sep 2017 15:00:48 +0000https://patchofland.com/blog/all-projects/2017/09/05/4-reasons-why-real-estate-investors-are-interested-in-the-city-by-the-bay/
https://patchofland.com/blog/all-projects/2017/09/05/4-reasons-why-real-estate-investors-are-interested-in-the-city-by-the-bay/marketing@patchofland.com (Marketing)MarketingPatch of Land is a Proud Sponsor of the 2017 Five Star ConferencePatch of Land is proud to be sponsoring and attending the 2017 Five Star Conference on September 18-20, 2017 at the Hyatt Regency in Dallas, TX.

The Five Star Conference and Expo is an integral source of information, collaboration, and progression for the housing and mortgage industry. Having long been a fountain of diverse perspectives and a platform for all voices throughout the industry, the Five Star is making inclusion the theme of the 2017 conference.

The 2017 Five Star Conference and Expo will explore the theme of inclusion from all angles—from the inclusion of ideas and voices from all sectors of housing and mortgage to the promotion of diversity and inclusion throughout the industry. From the diverse roles that make up our industry and the diverse individuals who work in those roles to the various backgrounds and financial profiles of those the housing industry aims to serve.

The 2017 Five Star Conference and Expo is committed to introducing new voices and original perspectives with a goal of advancing the industry, strengthening its professionals, and increasing access to homeownership for all Americans. Join thousands of professionals, explore hundreds of exhibits, and take part in dozens of interactive events at the largest event in mortgage servicing, the 2017 Five Star Conference and Expo.

Designed to take your business to the next level, the Five Star Conference and Expo offers industry-wide networking opportunities, Academic Labs led by esteemed experts, industry-recognized certifications, and exclusive membership events. It’s the Five Star. It’s where business gets done.

]]>Thu, 31 Aug 2017 15:00:41 +0000https://patchofland.com/blog/patch-of-land-events/2017/08/31/patch-of-land-is-a-proud-sponsor-of-the-2017-five-star-conference/
https://patchofland.com/blog/patch-of-land-events/2017/08/31/patch-of-land-is-a-proud-sponsor-of-the-2017-five-star-conference/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongPatch of Land to Attend the Colorado Mortgage SummitPatch of Land will be attending the Colorado Mortgage Summit at the Denver Marriot Tech Center in Denver, CO on September 19, 2017.

The Colorado Mortgage Summit presents an incredible lineup of educational sessions, business opportunities, and networking events curated specifically for the entrepreneurial men and women of the Colorado mortgage industry. Join your peers at Colorado's largest gathering of mortgage pros!

Here's a look at some of the topics:

How to Increase Originations 80% in 8 Weeks

How to Take More Market Share in 2018

Making "Competing" and "Compliance" Compatible

Winning the Automation War: Staying Relevant in a Robot Mortgage World

]]>Thu, 31 Aug 2017 15:00:17 +0000https://patchofland.com/blog/patch-of-land-events/2017/08/31/patch-of-land-to-attend-the-colorado-mortgage-summit/
https://patchofland.com/blog/patch-of-land-events/2017/08/31/patch-of-land-to-attend-the-colorado-mortgage-summit/cstrong@patchofland.com (Chelsea Strong)Chelsea StrongPatch of Land to Attend Realty411's Investor Expo in Santa MonicaPatch of Land will be attending Realty411's Investor Expo on September 23rd, 2017 at the Doubletree Suites by Hilton Hotel in Santa Monica, CA.

On Saturday, September 23rd, creative real estate leaders will unite in Santa Monica, California to discuss such trends, ideas and strategies. This insight and knowledge may help guests gain an edge for a favorable and prosperous new year.

Don’t Miss Realty411’s SPECTACULAR Real Estate Investor’s Expo with the LARGEST NAMES in the Industry! Who is Coming? The nation’s most successful investors are coming for ONE DAY ONLY!

Meet representatives from leading local financial companies who want to lend investors more money to do more deals. Here is your chance to meet them in person to discuss your transactions.